Canadian Outlook Long-Term Economic Forecast: 2002

This annual economic forecast presents the long-term national outlook.

Document Highlights 

Canada is expected to see average annual compound real GDP growth of 2.7 per cent between 2001 and 2020, in line with underlying potential output growth.

• CPI inflation will remain under control, rising modestly over the long term to 2.2 per cent by 2020.
• Interest rates will rise swiftly from the current cyclical trough, then remain static until 2010, when they will begin to nudge higher in the face of lower aggregate savings.
• Growth in government spending on goods and services is forecast to fall short of overall economic growth, helping to maintain annual surpluses at the federal level of between nine and fourteen billion dollars.
• Except for a brief burst between 2014 and 2017, housing starts will face prolonged stagnation as demographic factors weaken household formation.
• The Canadian dollar will appreciate substantially in the 2011-15 time period as semi-conductor technology matures, weakening capital inflow into the United States.
• Real export growth will weaken over the long term because of slowing U.S. growth and an appreciation