{
  "title": "IMF Executive Board Concludes 2024 Article IV Consultation with Canada",
  "publication": "IMF News, July 16, 2024",
  "sourceUrl": "https://www.imf.org/en/news/articles/2024/07/16/pr24276-canada-imf-exec-board-concludes-2024-art-iv-consult",
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  "summary": "Washington, DC – July 16, 2024: The Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation with Canada.",
  "publishDate": "2024-07-16",
  "sections": [
    {
      "heading": "Macroeconomic outlook and baseline projections",
      "content": "- The Canadian economy appears to have achieved a soft landing: inflation has come down almost to target, while a recession has been avoided, with GDP growth cushioned by surging immigration even as per capita income has shrunk.\n- Real GDP growth is expected to pick up slightly in 2024, supported by:\n  - recently initiated normalization of monetary policy,\n  - some easing of fiscal policy,\n  - continued (even if slowing) immigration,\n  - expansion of the Trans Mountain pipeline.\n- Inflation is set to continue declining, reaching the 2-percent target by early 2025.\n- Risks around the baseline forecast are broadly balanced:\n  - Downside risks: an abrupt global slowdown could dampen Canadian growth and inflation; tighter financial conditions could negatively affect the outlook.\n  - Upside risks: labor market resilience and stronger-than-anticipated US demand could lead to a stronger growth outlook."
    },
    {
      "heading": "Executive Board assessment and policy recommendations",
      "content": "- Directors commended the authorities for a strong track record of sound policies and agreed that the Canadian economy appears to have achieved a soft landing, with inflation declining to near target levels.\n- Monetary policy:\n  - Directors welcomed the Bank of Canada’s (BoC) decision to begin lowering policy rates in June.\n  - Further rate cuts should be carefully calibrated and data dependent; the monetary policy stance should remain restrictive for a while.\n  - Directors noted improvements in BoC communication and supported additional enhancements.\n- Fiscal policy:\n  - Directors commended prudent fiscal policy in international comparison; Canada enjoys a AAA rating.\n  - A somewhat tighter stance this year would support efforts to reduce inflation and rebuild buffers.\n  - Directors welcomed the introduction of quantitative fiscal objectives; most suggested adoption of a formal fiscal framework to better anchor policy.\n  - Continued coordination between fiscal and monetary policy remains imperative.\n- Financial sector and supervision:\n  - The financial system is resilient, with banks well capitalized and liquid.\n  - Data gaps preclude a more definitive assessment of nonbank financial institutions; Directors emphasized the need for continued vigilance and addressing data gaps for nonbanks, including through enhanced federal‑provincial supervisory cooperation.\n  - Directors supported continued efforts to strengthen the AML/CFT framework and encouraged implementation of the 2019 FSAP recommendations; they looked forward to the 2025 FSAP.\n- Structural policies to boost productivity and living standards:\n  - Key priorities: harness advanced technologies; reduce interprovincial barriers to trade; fully integrate immigrants into the labor market; increase female labor force participation (for instance, via the authorities’ affordable childcare program).\n  - Directors supported authorities’ actions to boost housing supply, noting housing affordability has reached its worst levels in a generation and further efforts at all levels of government are needed to close the sizeable housing gap.\n- Climate policy:\n  - Directors stressed that carbon pricing is the most cost‑effective way to achieve Canada’s ambitious climate goals.\n  - They acknowledged green industrial policies could play a role but urged care to avoid trade distortions and to maintain a level playing field for all companies."
    },
    {
      "heading": "Selected economic indicators and key statistics",
      "content": "- Nominal GDP (2022): Can$ 2,785 billion (US$ 2,139 billion)\n- Quota: SDR 11,023.9 million\n- GDP per capita (2022): US$ 54,015\n- Population (2022): 39.6 million\n- Main exports: Oil and gas, autos and auto parts, gold, lumber, copper.\n\n- Output and Demand (percent change, unless otherwise indicated)\n  - Real GDP:\n    - 2020: -5.0\n    - 2021: 5.3\n    - 2022: 3.8\n    - 2023: 1.2\n    - 2024: 1.3\n    - 2025: 2.4\n    - 2026: 2.0\n    - 2027: 1.8\n    - 2028: 1.6\n    - 2029: (value not provided)\n  - Total domestic demand:\n    - 2020: -6.1\n    - 2021: 6.5\n    - 2022: 5.1\n    - 2023: -0.3\n    - 2024: 1.4\n    - 2025: 2.9\n    - 2026: 2.3\n    - 2027: 2.1\n    - 2028: 1.9\n  - Private consumption:\n    - 2020: -6.3\n    - 2021: 1.7\n    - 2022: 2.8\n    - 2023: 3.6\n    - 2024: 2.7\n    - 2025: 2.6\n  - Total investment:\n    - 2020: -7.0\n    - 2021: 14.3\n    - 2022: 7.1\n    - 2023: -6.0\n    - 2024: -0.9\n    - 2025: 3.0\n  - Net exports, contribution to growth:\n    - 2020: 0.3\n    - 2021: -1.8\n    - 2022: -1.4\n    - 2023: 1.5\n    - 2024: -0.2\n    - 2025: -0.5\n  - Output gap 1/ (Percent of potential GDP):\n    - 2020: -3.4\n    - 2021: 0.8\n    - 2022: 0.0\n    - 2023: -0.6\n    - 2024: -0.1\n    - 2025: 0.1\n\n- Unemployment and Inflation\n  - Unemployment rate (average) 2/ (Percent):\n    - 2020: 9.7\n    - 2021: 7.5\n    - 2022: 5.4\n    - 2023: 6.2\n    - 2024: 6.3\n    - 2025: 6.0\n  - CPI inflation (average):\n    - 2020: 0.7\n    - 2021: 3.4\n    - 2022: 6.8\n    - 2023: 3.9\n    - 2024: 2.5\n\n- Saving and Investment 3/ (Percent of GDP)\n  - Gross national saving:\n    - 2020: 20.7\n    - 2021: 24.3\n    - 2022: 25.0\n    - 2023: 23.3\n    - 2024: 23.4\n    - 2025: 23.1\n    - 2026: 22.8\n    - 2027: 22.5\n    - 2028: 22.2\n  - Private saving:\n    - 2020: 27.5\n    - 2021: 23.6\n    - 2022: 21.6\n    - 2023: 21.5\n    - 2024: 21.2\n    - 2025: 21.0\n    - 2026: 20.6\n    - 2027: 20.3\n  - Personal saving:\n    - 2020: 32.5\n    - 2021: 10.4\n    - 2022: 11.0\n    - 2023: 14.4\n    - 2024: 12.8\n    - 2025: 11.2\n    - 2026: 10.5\n    - 2027: 9.8\n    - 2028: 9.9\n  - Business saving:\n    - 2020: 7.3\n    - 2021: 8.7\n    - 2022: 10.0\n    - 2023: 10.8\n    - 2024: 10.3\n\n- Gross domestic investment:\n  - 2020: 22.7\n  - 2021: 25.4\n  - 2022: 24.0\n  - 2023: 23.5\n\n- General Government Fiscal Indicators 2/ (NA basis)\n  - Revenue:\n    - 2020: 41.4\n    - 2021: 42.5\n    - 2022: 41.1\n    - 2023: 41.9\n    - 2024: 41.3\n    - 2025: 41.2\n    - 2026: (value not provided)\n  - Expenditures:\n    - 2020: 52.4\n    - 2021: 45.4\n    - 2022: 41.0\n    - 2023: 42.2\n    - 2024: 42.1\n    - 2025: 42.0\n    - 2026: 41.8\n  - Overall balance:\n    - 2020: -10.9\n    - 2021: -2.9\n    - 2022: -1.2\n    - 2023: -1.0\n    - 2024: -0.8\n    - 2025: -0.7\n  - Structural balance 1/:\n    - 2020: -8.2\n    - 2021: -1.9\n    - 2022: -0.4\n  - Gross Debt:\n    - 2020: 118.2\n    - 2021: 113.5\n    - 2022: 107.4\n    - 2023: 107.0\n    - 2024: 104.9\n    - 2025: 102.1\n    - 2026: 100.1\n    - 2027: 98.4\n    - 2028: 96.8\n    - 2029: 95.2\n  - Net debt:\n    - 2020: 16.1\n    - 2021: 15.6\n    - 2022: 13.4\n    - 2023: 13.5\n    - 2024: 13.6\n\n- Money and Credit (Annual average)\n  - Household Credit Growth:\n    - 2020: 5.2\n    - 2021: 5.0\n    - 2022: 3.5\n  - Business Credit Growth:\n    - 2020: -12.7\n    - 2021: 6.4\n    - 2022: (value not provided)\n\n- Balance of Payments\n  - Current account balance 3/: -2.0 (Percent of GDP)\n  - Merchandise Trade balance 3/: -1.1 (Percent of GDP)\n  - Export volume (percent change):\n    - 2020: -7.7\n    - 2021: 4.5\n    - 2022: 3.3\n    - 2023: 3.1\n  - Import volume (percent change):\n    - 2020: 8.8\n    - 2021: 5.8\n    - 2022: 4.3\n    - 2023: 4.8\n  - Terms of trade:\n    - 2020: -3.3\n    - 2021: 4.7\n    - 2022: 0.5\n\nIMF press release: Executive Board Concludes 2024 Article IV Consultation with Canada, July 16, 2024.\n\n---\n\n\n References\n\n- https://www.imf.org/-/media/images/imf/bios/imfboard.jpg\n- The Executive Board\n- Canada and the IMF\n- IMF Policy Advice -- A Factsheet\n- Press Releases\n- PRESS CENTER\n- [[1]](https://www.imf.org/?scitemid=%7BA45F2047-11EF-4A77-9335-89231C65CB3A%7D&sclang=en&scmode=preview&scsite=imf)\n- http://www.IMF.org/external/np/sec/misc/qualifiers.htm\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2024/07/16/pr24276-canada-imf-exec-board-concludes-2024-art-iv-consult"
    }
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    "Published: July 16, 2024",
    "The Canadian economy appears to have achieved a soft landing: inflation has come down almost to target, while a recession has been avoided, with GDP growth cushioned by surging immigration even as per capita income has shrunk.",
    "Real GDP growth is expected to pick up slightly in 2024, supported by:",
    "Inflation is set to continue declining, reaching the 2-percent target by early 2025.",
    "Risks around the baseline forecast are broadly balanced:",
    "Directors commended the authorities for a strong track record of sound policies and agreed that the Canadian economy appears to have achieved a soft landing, with inflation declining to near target levels.",
    "Monetary policy:",
    "Fiscal policy:",
    "Financial sector and supervision:",
    "Structural policies to boost productivity and living standards:",
    "Climate policy:",
    "Nominal GDP (2022): Can$ 2,785 billion (US$ 2,139 billion)",
    "Quota: SDR 11,023.9 million",
    "GDP per capita (2022): US$ 54,015",
    "Population (2022): 39.6 million",
    "Main exports: Oil and gas, autos and auto parts, gold, lumber, copper.",
    "Output and Demand (percent change, unless otherwise indicated)",
    "Unemployment and Inflation",
    "Saving and Investment 3/ (Percent of GDP)",
    "Gross domestic investment:",
    "General Government Fiscal Indicators 2/ (NA basis)",
    "Money and Credit (Annual average)",
    "Balance of Payments",
    "[https://www.imf.org/-/media/images/imf/bios/imfboard.jpg](https://www.imf.org/-/media/images/imf/bios/imfboard.jpg)",
    "[The Executive Board](https://www.imf.org/external/np/sec/memdir/eds.aspx)",
    "[Canada and the IMF](http://www.imf.org/external/country/CAN/index.htm)",
    "[IMF Policy Advice -- A Factsheet](https://www.imf.org/en/about/factsheets/imf-surveillance)",
    "[Press Releases](https://www.imf.org/en/news/searchnews)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[[1]](https://www.imf.org/?sc_itemid=%7BA45F2047-11EF-4A77-9335-89231C65CB3A%7D&sc_lang=en&sc_mode=preview&sc_site=imf)",
    "[http://www.IMF.org/external/np/sec/misc/qualifiers.htm](http://www.imf.org/external/np/sec/misc/qualifiers.htm)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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