Ottawa, ON — The Conference Board of Canada has issued its latest Canadian Outlook Economic Forecast: Spring 2007. In an executive summary by Pedro Antunes, the Board says its quarterly economic forecast provides highlights of the Canadian Outlook report, which presents the short-term national outlook. Here are some highlights.
A halt to business inventory accumulation held back growth in the fourth quarter of 2006, but the economy is poised to do well. Real GDP in Canada is forecast to advance by 2.8% this year and a stellar 3.4% in 2008.
This forecast incorporates the March 2007 federal budget. The budgets most important spending measure allocated $39 billion in new money to the provinces and territories.
The U.S. economy charged ahead in the fourth quarter of 2006 despite the trepidation over housing prices and steep declines in residential construction. While risks remain high, economic growth south of the border seems unwavering — but slower.
Aside from forestry products, prices for Canadas raw materials continued to escalate in recent months. High commodity prices will continue to shore up income and investment in Canada in the foreseeable future.
Although core inflation inched up early in the year, the Bank of Canada is not expected to raise short-term interest rates.
The Federal Reserve Board is also expected to keep rates flat in the United States. This, coupled with stable commodity prices, will keep the loonie from gaining or losing ground relative to the greenback in 2008.
The full report can be purchased for $480 at www.conferenceboard.ca.