Interest rate pressure

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Growth has been higher than expected so far this year, and the economy is now estimated to be operating close to full capacity. The pace of activity should remain buoyant up to the beginning of 2005, before cooling down to near potential rates of around 3%. With soaring oil prices and easing capacity constraints, inflation is expected to hover above the mid-point of the target range until next year.
The Bank of Canada needs to continue raising interest rates toward their neutral level to ensure adherence to the inflation target. The government should avoid any easing of the fiscal stance at this juncture, despite the unexpectedly large surplus recorded for the last fiscal year. Great vigilance should be exercised over spending, in particular with regard to additional transfers from federal to lower levels of government.
Population (000s), 200331 630
Area (000 sq km)9 976
GDP (Billion USD), 2003856.6
Life expectancy at birth (Women, Men), 2001 82.2, 77.1
Total labour force (000s), 200317 102
Government typeConfederation
Indicators% change unless otherwise indicated
GDP growth3.03.33.1
Household savings ratio1.51.61.7
Consumer price index1.92.01.8
Short-term interest rate (%)
Unemployment rate (%)
General government financial balance (% GDP)-
Current account balance (% GDP)
Source: OECD© OECD Observer No 245, November 2004

Economic data

GDP growth: -9.8% Q2/Q1 2020 2020
Consumer price inflation: 1.3% Sep 2020 annual
Trade (G20): -17.7% exp, -16.7% imp, Q2/Q1 2020
Unemployment: 7.3% Sep 2020
Last update: 10 Nov 2020

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