Canadian Outlook Economic Forecast: Autumn 2004

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

• The Canadian economy is forecast to generate growth of 3 per cent in 2004 and 3.2 per cent in 2005
• Short-term interest rates are forecast to rise by 180 basis points by the end of 2005 as the Bank of Canada gradually reduces monetary stimulus
• Government spending will lag behind the rest of the economy as provincial governments strive to balance their books
• Housing starts will dip below the 200,000 level in 2005 for the first time in three years
• U.S. economic growth will slow from 4.2 per cent in this year to 3.2 per cent in 2005
• The dollar will hover around $0.75 U.S. this year and next