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.
Canadian Outlook Economic Forecast: Spring 2008
Canadian Outlook Economic Forecast: Spring 2008
Canadian Economic Analysis
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- The U.S. economy is close to recession as declining residential construction and weak consumer spending are believed to have resulted in slightly negative growth over the first quarter of 2008.
- Real GDP is expected to advance by 2.2 per cent this year, down from 2.8 per cent forecast in our previous Canadian Outlook.
- While Canadian exporters continue to struggle with a strong loonie and faltering demand south of the border, Canada’s domestic economy surged ahead at the end of last year. Real final domestic demand posted remarkable annualized growth of nearly 7 per cent in the final quarter of 2007!
- The U.S. Federal Reserve (Fed) has lowered short-term rates by 300 basis points since August. Given the stronger economic performance in Canada, The Bank of Canada has taken softer measures than its counterpart in the United States.
- Thus far in 2008, federal and provincial budgets tabled have been cautious due to concerns about economic performance. Nonetheless, there is plenty of fiscal stimulus in the pipeline.
- A surge in cross-border shopping, even for automobiles, is putting pressure on Canadian retailers to reduce prices.
- High commodity prices will continue to lift the domestic economy, while resource sector exports are also expected to post strong growth this year.
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