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Real GDP in Canada is expected to grow by 2.0 per cent in 2018, 2.2 per cent in 2019 and 1.9 per cent in 2020.

The Bank updated its forecast for real economic growth to 1.3 percent this year, 1.9 percent next year and 2.0 percent in 2021.

The Bank projects that growth in the Canadian economy will accelerate from 1.6 percent this year to 2 percent in 2021.

The Bank expects Canada’s economy to grow by almost 4 percent on average in 2021 and 2022, following a decline of about 5 ½ percent in 2020.

While a second wave of COVID-19 is hurting Canadians now, the economy should rebound strongly later in the year. The Bank is forecasting growth of around 4 percent this year and close to 5 percent in 2022.

As the economy reopens after the third wave of COVID-19, growth should rebound strongly. The Bank is forecasting growth of about 6 percent this year, slowing to about 4 ½ percent in 2022 and 3 ¼ percent in 2023.

Deputy Governor Lawrence Schembri talks about changes to the labour market, and how the pandemic affected Canadian workers. He also discusses how the Bank is adapting labour market analysis tools to help guide monetary policy decisions that will support a more inclusive recovery.

Overall, the Bank's outlook for growth and inflation in Canada is largely unchanged from that in its April Monetary Policy Report (MPR). Growth in the first half of 2006 appears to have been a little stronger than projected, and the Canadian dollar has traded in a higher range than was envisaged in the April MPR.

The Canadian and world economies are evolving essentially in line with the Bank's expectations, and the outlook for growth and inflation in Canada is similar to that in the October MPR. Canada's economy continues to adjust to global developments and to the associated changes in relative prices.

Canada's experience is interesting and potentially insightful for two important reasons. First, Canada has more experience with a flexible exchange rate than almost any other country.