Canadian Outlook Economic Forecast: Summer 2018

This quarterly economic forecast provides highlights of the Canadian Outlook report, which presents the short-term national outlook. The national economy is projected to grow by 1.8 per cent in 2018–19 in the wake of a 3 per cent gain last year. Despite strong growth in the U.S. economy and the competitive value of the Canadian dollar, growth in exports will be restrained by uncertainty over NAFTA renegotiations and rising tariffs. While wage gains will help sustain consumer spending, high debt levels, rising interest rates, easing home prices, and higher inflation will result in a slower rate of increase. Fiscal deficits will ramp up over the near term due to weaker growth in government revenues and higher spending. Although inflation is picking up, the Bank of Canada will continue to run an accommodative monetary policy due to uncertainty about trade and weaker economic growth.