Canadian Outlook Long-Term Economic Forecast: 2001

This annual executive summary provides highlights of the Canadian Outlook that presents the short-term national outlook.

Document Highlights

• Average annual compound real GDP growth between 2000 and 2020 will be 2.8 per cent, in line with underlying potential output growth.
• CPI inflation will rise modestly over the long term to reach 2.2 per cent by 2020.
• Interest rates will fall from current levels over most of the long-term forecast, with the prime rate at 6.5 per cent in 2020.
• Growth in government spending on goods and services is forecast to average slightly below overall economic growth, helping to maintain annual surpluses at the federal level of between five and ten billion dollars.
• Except for a brief burst in the 2012-2016 time period, housing starts will face prolonged stagnation as demo-graphic factors weaken household formation.
• The Canadian dollar will appreciate substantially in the 2009-15 time period as semi-conductor technology matures, weakening capital inflow into the U.S.
• Real export growth will weaken over the long-term because of slowing U.S. growth and an appreciation in the dollar.