| The average of private sector forecasts has been used as the basis for economic and fiscal planning in Canada since 1994, helping to ensure objectivity and transparency, and introducing an important element of independence into the government's economic and fiscal forecast. |
| The Department of Finance Canada surveyed a group of private-sector economists in March 2024. Overall, the private sector economists surveyed expect the economy to avoid a recession, seeing moderate below-potential growth of roughly 1 per cent on average over the year weighed down by the effects of past interest rate increases (Chart 17). Growth is then expected to strengthen slightly above 2 per cent in the first two quarters of 2025. Overall, private sector economists expect growth of 0.7 per cent in 2024 and 1.9 per cent in 2025, compared to, respectively, 0.5 per cent and 2.2 per cent in the 2023 Fall Economic Statement (restated for historical revisions). |
| As the Canadian economy moderates, the unemployment rate is expected to rise to a peak of 6.5 per cent in the fourth quarter of this year and average 6.3 per cent in 2024 (compared to, respectively, 6.5 per cent and 6.4 per cent in the 2023 Fall Economic Statement). The unemployment rate is expected to remain low by historical standards, and far below the peaks typically seen in recessions. |
| Private sector economists expect CPI inflation to ease to about 2 per cent by the end of 2024 and to average 2.5 per cent for the year as a whole, the same as projected in the 2023 Fall Economic Statement. |
| Short-term interest rates are expected to decline from an average of 4.8 per cent in 2023 to 4.5 per cent in 2024 and to 3.1 per cent in 2025, about 20 basis points higher in each year compared to the 2023 Fall Economic Statement (Chart 18). Short-term interest rates are then expected to settle at 2.7 per cent over the last three years of the forecast horizon. The outlook for long-term interest rates has been revised up by about 10 basis points on average per year compared to the 2023 Fall Economic Statement. |
| GDP inflation in the second half of last year was stronger than expected in the 2023 Fall Economic Statement. GDP inflation averaged 1.6 per cent for the year as a whole, compared to 1 per cent expected in the 2023 Fall Economic Statement. As well, private sector economists have revised up their outlook for 2024 to 3.0 per cent (compared to 2.0 per cent in the 2023 Fall Economic Statement), while 2025 has been revised down slightly to 1.9 per cent (from 2.0 per cent). In the outer years, GDP inflation is expected to be slightly lower by about 0.1 percentage points on average per year. |
| Reflecting higher-than-expected GDP inflation in the second half of last year, the level of nominal GDP in 2023 came in $18 billion higher than projected in the 2023 Fall Economic Statement. Furthermore, the nominal GDP level difference with the 2023 Fall Economic Statement is expected to increase to $56 billion in 2024 reflecting a stronger near-term outlook for both real GDP growth and GDP inflation. However, because of lower GDP inflation in the outer years and slower expected real GDP growth in 2025 and 2026, the nominal GDP level difference with the 2023 Fall Economic Statement gradually declines over the last four years of the forecast horizon to average $39 billion per year over that period. |
| For the full document click the link below:
https://budget.canada.ca/2024/report-rapport/overview-apercu-en.html#a6 |
