Canadian Outlook Economic Forecast: Autumn 2003

This quarterly economic forecast examines the short-term economic outlook for Canada – all major components including consumer expenditures, housing, government, non-energy business investment, and trade. The outlook for the financial, labour, and energy markets is also given along with costs and prices. The U.S. economic outlook is presented in a separate section.

Document Highlights

• After expanding by a sluggish 1.7 per cent this year, the Canadian economy will see 3 per cent growth in 2004.
• Thanks to lower energy prices and economic weakness, price inflation has subsided and is forecast to remain tame over the near term.
• Short-term interest rates will remain subdued through 2004.
• Next year’s export revival will be restrained by the recent sharp increase in the dollar.
• A steady drop in the Canada-U.S. short-term interest rate spread will cause the Canadian dollar to lose steam through the end of next year.