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Financial Outlook

The Bank of Canada believes that the economy grew by 1.6% in 2013, following growth of 1.7% in 2012, and is forecasting a 2.3% expansion in 2014. The central bank estimates growth of 2.6% in 2015, enabling the economy to return to health by the middle or end of that year following the global financial crisis. The economy should benefit from the recovery in the United States, which accounts for three-quarters of all exports, and the fall in the value of the Canadian dollar. Inflation, which fell to an estimated 1% in 2013, poses little threat. Encouragingly, the federal budget surplus could also be bigger than predicted in 2015, finance minister Jim Flaherty said in January 2014, as the domestic and US economy gain strength. Officials estimate that the government could achieve a surplus of C$4.6 billion by 2015, nearly C$1 billion more than the estimate included in Canada’s November 2013 economic update. However, there are concerns over a potential bubble in house prices and high levels of household debt, which reached the record level of 164% of annual after-tax income in 2013.

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Further reading on Canada

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