Canadian Outlook Economic Forecast: Winter 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 Highlight

• The Canadian economy will expand by 3 per cent in 2004 and by 3.6 per cent in 2005.
• The Canadian dollar will lose value steadily against its U.S. counterpart through the end of 2005.
• Interest rates will begin to rise at the end of 2004 as the output gap narrows.
• Housing markets will weaken as rising borrowing costs lower affordability.
• Fiscal policy will be a drag on overall growth in the near term.