Canada Economic Forecast

Canada Economic Forecast

April 30, 2018

Canada’s economy stumbled at the outset of the year, contracting in January on an apparent one-off monthly decline in oil and gas output as unplanned maintenance took facilities offline. Moreover, full-quarter growth appears to have eased further on the heels of a downshift late last year as the economy dealt with short-term setbacks in both the housing market and the external sector. Housing metrics in March continued to signal uncertainty as the market dealt with new mortgage-lending rules. In the external sector, transportation bottlenecks early this year constrained exports and are likely to have dented growth in the first quarter. On the bright side, business confidence was generally upbeat in the quarter, and NAFTA appears increasingly likely to survive renegotiations.

Canada Economic Growth

Despite the slowdown since last year, economic fundamentals remain solid, and the economy should expand at a healthy pace this year. Tighter labor market dynamics should lift wages, but indebted households will still feel the pinch of higher interest rates. Moreover, heavier government spending and improved oil and gas exports are expected to lend support. Meanwhile, the Bank of Canada’s continued tightening could threaten to unwind the housing market and the recent comeback in business investment. Concerns around NAFTA, although somewhat alleviated, also still weigh on the outlook. Met the why particular panelists expect growth of 2.1% in 2018, down 0.1 percentage points from last month’s forecast, and 1.9% in 2019.

Canada Economy Data

20132014201520162017
Population (million)35.135.535.836.236.6
GDP per capita (USD)52,48250,57743,35442,244-  
GDP (USD bn)1,8421,7951,5531,530-  
Economic Growth (GDP, annual variation in %)2.52.60.91.5-  
Domestic Demand (annual variation in %)1.61.90.31.0-  
Consumption (annual variation in %)2.62.81.92.4-  
Investment (annual variation in %)0.30.2-3.4-2.5-  
Exports (G&S, annual variation in %)2.75.83.41.0-  
Imports (G&S, annual variation in %)1.72.20.3-0.9-  
Industrial Production (annual variation in %)1.84.2-1.3-0.3-  
Retail Sales (annual variation in %)5.63.62.02.6-  
Unemployment Rate7.16.96.97.0-  
Fiscal Balance (% of GDP)-0.90.00.4-0.9-  
Public Debt (% of GDP)32.430.630.630.8-  
Money (annual variation in %)6.94.86.08.6-  
Inflation Rate (CPI, annual variation in %, eop)1.21.51.61.5-  
Inflation Rate (CPI, annual variation in %)0.91.91.11.4-  
Inflation (PPI, annual variation in %)0.42.5-  -  -  
Policy Interest Rate (%)1.001.000.500.50-  
Stock Market (annual variation in %)9.67.4-11.117.5-  
Exchange Rate (vs USD)1.061.161.381.34-  
Exchange Rate (vs USD, aop)1.031.111.281.32-  
Current Account (% of GDP)-3.2-2.4-  -  -  
Current Account Balance (CAD bn)-61.1-48.2-  -  -  
Trade Balance (CAD billion)-3.714.6-  -  -  

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Canada Facts

ValueChangeDate
Bond Yield2.481.00 %May 15
Exchange Rate1.280.15 %May 16
Stock Market16,1180.23 %May 16

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