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Canadian Outlook Economic Forecast: Summer 2008

The Conference Board of Canada, 16 pages, July 15, 2008
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This quarterly economic forecast provides highlights of the Canadian Outlook report, which presents the short-term national outlook.

Document Highlights

  • Data for the first quarter of 2008 was paradoxical in that growth in real gross domestic product (GDP) in the U.S. outperformed that in Canada. However, in terms of income, employment, and domestic demand growth, Canada remains in much better shape.
  • A decline in exports, especially in the auto sector, will result in real GDP growth for Canada of only 1.7 per cent this year, a full percentage point below the 2007 performance. Economic growth is expected to accelerate to 2.7 per cent in 2009, helped by a better trade performance and still strong domestic demand.
  • The general rise in commodity prices may be here to stay. Seemingly insatiable global demand for raw materials, coupled with a recovery in forestry product prices, should keep prices elevated and shore up resource revenues and private investment.
  • Luckily for manufacturers, the loonie seems to have stopped riding the coattails of energy prices. The Canadian dollar is expected to remain relatively stable over 2008 and 2009, just shy of parity.
  • Surprise, surprise . . . despite the dire projections in the latest round of federal and provincial budgets, government revenues are, once again, growing more strongly than expected. However, at the regional level, results will be lopsided in favour of resourceand energy-rich provinces.