Economic Update and Mortgage Rate Forecast

Last week, Minister of Finance Jim Flaherty, released an update on the Government’s economic and fiscal projections.

Some of the key highlights are:

  • The Government’s Action Plan is on track.
  • Canada will have the strongest average economic growth among Group of Seven countries over 2010 and 2011
  • The deficit is projected to decrease from $55.6 billion in 2009–10 to $29.8 billion in 2011–12, and to $1.7 billion in 2014–15. In 2015–16, the federal budget will see a small surplus of $2.6 billion.
  • Our federal debt in to income ration will decline to 30.8 per cent by the end of 2016.
  • Private sector economists expect that economic growth in Canada will continue to be moderate over the next year. On average they are forecasting real GDP growth to be 1.8 per cent in the third quarter of 2010 followed by growth of about 2.5 per cent over the next three quarters.
  • Roughly 423,000 jobs have been created in Canada since July 2009, this will more than make up for the loss due to the global recession
  • Our unemployment rate has fallen to 8 per cent, more than 1½ percentage points below that of the United States.
  • For full details, visit the Department of Finance Canada website

The banks have also updated their interest rate forecasts for the rest of the year and next year:

Bank 2010 Forecast 2011 Forecast
BMO 1.00% 2.25%
CIBC 1.00 % 1.75%
RBC 1.00% 2.25%
ScotiaBank 1.00 % 1.75%
TD 1.00 % 2.00%
Average 1.00% 2.00%

Related Topics

Economic News / Mortgage News / Mortgages

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