Canada Economic Forecast

Canada Economic Forecast

March 27, 2018

Canada’s economy finished the fourth quarter of 2017 on a lukewarm note, confirming the loss of momentum from the blazing growth in the first half of the year. Holding back growth was a further moderation in household spending as higher interest rates weighed on consumers. That said, business investment shot up on firms’ newfound optimism, which sent imports higher. Furthermore, residential investment rose on a one-off as construction rushed to get underway before tighter mortgage rules came into effect on 1 January. Moreover, available data for the first quarter has been broadly positive, if unremarkable; the private sector remains upbeat, while the housing market has been cooling as regulatory measures bite. On 27 February, the Trudeau government released this year’s budget, which contained no surprises and again set no timeline for returning to black. On trade, there has been cause for optimism. In March, Canada signed the TPP-11 and the U.S. relaxed its stance on rules of origin in ongoing NAFTA renegotiations, which presents a clearer path to a successful renewal of the agreement.

Canada Economic Growth

Despite the downshift in the second half of last year, economic fundamentals remain very solid and the economy is expected to expand at a healthy pace this year. The tight labor market should lift wages, but heavily indebted households are expected to continue moderating their spending as interest rates rise. Moreover, higher borrowing costs are expected to cool the property market somewhat. FocusEconomics panelists expect growth of 2.2% in 2018, unchanged from last month’s estimate, and 1.8% in 2019.

Canada Economy Data

20122013201420152016
Population (million)34.735.1-  -  -  
Population (million)34.735.1-  -  -  
GDP per capita (USD)52,55252,482-  -  -  
GDP per capita (USD)52,55252,482-  -  -  
GDP (USD bn)1,8241,842-  -  -  
GDP (USD bn)1,8241,842-  -  -  
Economic Growth (GDP, annual variation in %)1.72.5-  -  -  
Economic Growth (GDP, annual variation in %)1.72.5-  -  -  
Domestic Demand (annual variation in %)2.41.6-  -  -  
Domestic Demand (annual variation in %)2.41.6-  -  -  
Consumption (annual variation in %)1.92.6-  -  -  
Consumption (annual variation in %)1.92.6-  -  -  
Investment (annual variation in %)3.70.3-  -  -  
Investment (annual variation in %)3.70.3-  -  -  
Exports (G&S, annual variation in %)2.62.7-  -  -  
Exports (G&S, annual variation in %)2.62.7-  -  -  
Imports (G&S, annual variation in %)3.61.7-  -  -  
Imports (G&S, annual variation in %)3.61.7-  -  -  
Industrial Production (annual variation in %)0.01.8-  -  -  
Industrial Production (annual variation in %)0.01.8-  -  -  
Retail Sales (annual variation in %)0.45.6-  -  -  
Retail Sales (annual variation in %)0.45.6-  -  -  
Unemployment Rate7.37.1-  -  -  
Unemployment Rate7.37.1-  -  -  
Fiscal Balance (% of GDP)-1.0-0.9-  -  -  
Public Debt (% of GDP)33.132.4-  -  -  
Public Debt (% of GDP)33.132.4-  -  -  
Money (annual variation in %)5.56.9-  -  -  
Money (annual variation in %)5.56.9-  -  -  
Inflation Rate (CPI, annual variation in %, eop)0.81.2-  -  -  
Inflation Rate (CPI, annual variation in %, eop)0.81.2-  -  -  
Inflation Rate (CPI, annual variation in %)1.50.9-  -  -  
Inflation Rate (CPI, annual variation in %)1.50.9-  -  -  
Inflation (PPI, annual variation in %)1.10.4-  -  -  
Inflation (PPI, annual variation in %)1.10.4-  -  -  
Policy Interest Rate (%)1.001.00-  -  -  
Policy Interest Rate (%)1.001.00-  -  -  
Stock Market (annual variation in %)4.09.6-  -  -  
Stock Market (annual variation in %)4.09.6-  -  -  
Exchange Rate (vs USD)0.991.06-  -  -  
Exchange Rate (vs USD)0.991.06-  -  -  
Exchange Rate (vs USD, aop)1.001.03-  -  -  
Exchange Rate (vs USD, aop)1.001.03-  -  -  
Current Account (% of GDP)-3.6-3.2-  -  -  
Current Account (% of GDP)-3.6-3.2-  -  -  
Current Account Balance (CAD bn)-65.7-61.1-  -  -  
Current Account Balance (CAD bn)-65.7-61.1-  -  -  
Trade Balance (CAD billion)-6.9-3.7-  -  -  
Trade Balance (CAD billion)-6.9-3.7-  -  -  

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Canada Facts

ValueChangeDate
Bond Yield2.281.00 %Apr 18
Bond Yield2.281.00 %Apr 18
Exchange Rate1.270.15 %Apr 19
Exchange Rate1.270.15 %Apr 19
Stock Market15,4540.23 %Apr 19
Stock Market15,4540.23 %Apr 19

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