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Economic growth in Canada is expected to average 2.1 per cent in 2015 and 2.4 per cent in 2016, with a return to full capacity around the end of 2016.

The Bank expects a sharp rebound in economic activity in the reopening phase of the recovery, followed by a more prolonged recuperation phase.

Growth in the Canadian economy is projected to reach 2.8 per cent this year before slowing to 2.0 per cent next year and 1.6 per cent in 2019.

The Canadian economy is now clearly in excess demand, and inflation is high and broadening. The Bank is projecting inflation to decline to about 3% by the end of 2023, and to return to the 2% target by the end of 2024.

This issue features a summary of the Bank’s annual conference, which this year dealt with financial globalization, and three articles that present research by Bank staff on Canada’s mortgage market, the role of adverse selection in financial crises, and payment networks.

The Canadian economy is estimated to have grown by 1.8 per cent in 2013, and is projected to grow by 2.5 per cent in both 2014 and 2015, gradually returning to its full production capacity over the next two years.

Inflation in Canada is still too high but has declined from its peak. As the effects of higher interest rates continue to spread through the economy, and with declines in energy prices and improved supply chains, inflation is projected to fall to around 3% in the middle of 2023 and reach the 2% target in 2024.

The Canadian economy entered 2022 in a strong position. The Bank is forecasting growth of 4% in 2022 and about 3½ % in 2023.

Growth in the Canadian economy is expected to increase from 1.1 per cent this year to about 2.0 per cent in 2017 and 2018.

Quarterly Financial Report - First Quarter 2015 - For the period ended 31 March 2015