Canada Economic Forecast

Canada Economic Forecast

August 28, 2018

Output bounced back in May, putting the economy on track for a solid second quarter. Most sectors fired on all cylinders as one-off weather disruptions faded out, and all signs suggest that growth held up reasonably well through the first half of the year. Despite the slowdown in consumer spending seen since last year, low unemployment and robust wage gains have continued to underpin the domestic economy. Inflation grazed the upper bound of the Bank of Canada’s target band in July and core metrics hint that little slack remains in the economy. Moreover, the housing market appears to have finally stabilized after an uneven start to the year, and chipper business sentiment points to firm non-residential investment. Short-term downside risks still center on trade, although NAFTA renegotiations were resuscitated in mid-August when a handshake deal between Mexican and U.S. negotiators opened the door for three-way talks to resume.

Canada Economic Growth

Healthy economic fundamentals will underpin a solid outturn this year. Homegrown risks to the outlook appear to be fading as the housing market recovers and non-residential investment firms up. On the external front, although oil and gas exports are expected to lend support this year, the future of NAFTA remains uncertain. Met the why particular analysts expect growth of 2.1% in 2018, unchanged from last month’s forecast, and 1.9% in 2019.

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Canada Facts

ValueChangeDate
Bond Yield2.431.00 %Sep 21
Exchange Rate1.300.15 %Sep 24
Stock Market16,2070.23 %Sep 24

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