Economic and Fiscal Outlook — March 2024
This report provides a baseline projection to help parliamentarians gauge potential economic and fiscal outcomes under current policy settings.
Communications
Quotes
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We expect restrictive monetary policy to restrain growth in consumer spending in the first half of the year and to dampen residential investment over the course of this year. As excess supply in the economy increases and commodity prices continue to weaken, we project that CPI inflation will return to its 2% target by the end of 2024.
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Excluding potential measures that could be included in the upcoming Budget and assuming existing temporary measures sunset as scheduled, the deficit is projected to decrease to $40.8 billion in 2024-25 while the federal debt-to-GDP ratio edges higher to 42.5%. Under status quo policy, the deficit is projected to decline over the medium term, falling to $16.9 billion (0.5% of GDP) in 2028-29.
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In terms of downside risks, we continue to judge that the most important risk is a larger-than-expected impact on the Canadian economy, including housing, from the Bank of Canada’s restrictive monetary policy, which would negatively affect the Canadian economy and federal finances. In terms of upside risks, we judge that the most important risk is higher-than-projected growth in exports if U.S. real GDP growth does not slow as quickly as anticipated.
Parliamentary Budget Officer