## IMF Executive Board Concludes 2024 Article IV Consultation with Canada

_IMF News, July 16, 2024_

## Source details

**Canonical URL:** [IMF Executive Board Concludes 2024 Article IV Consultation with Canada](https://www.imf.org/en/news/articles/2024/07/16/pr24276-canada-imf-exec-board-concludes-2024-art-iv-consult)

## Other formats

- [Markdown version](/en/news/articles/2024/07/16/pr24276-canada-imf-exec-board-concludes-2024-art-iv-consult/index.md)
- [Structured JSON version](/en/news/articles/2024/07/16/pr24276-canada-imf-exec-board-concludes-2024-art-iv-consult/index.json)
- [Bundle manifest](/en/news/articles/2024/07/16/pr24276-canada-imf-exec-board-concludes-2024-art-iv-consult/bundle-manifest.json)

## Bibliographic details
- Published: July 16, 2024

---

### Macroeconomic outlook and baseline projections
- 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:
  - recently initiated normalization of monetary policy,
  - some easing of fiscal policy,
  - continued (even if slowing) immigration,
  - expansion of the Trans Mountain pipeline.
- Inflation is set to continue declining, reaching the 2-percent target by early 2025.
- Risks around the baseline forecast are broadly balanced:
  - Downside risks: an abrupt global slowdown could dampen Canadian growth and inflation; tighter financial conditions could negatively affect the outlook.
  - Upside risks: labor market resilience and stronger-than-anticipated US demand could lead to a stronger growth outlook.

### Executive Board assessment and policy recommendations
- 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:
  - Directors welcomed the Bank of Canada’s (BoC) decision to begin lowering policy rates in June.
  - Further rate cuts should be carefully calibrated and data dependent; the monetary policy stance should remain restrictive for a while.
  - Directors noted improvements in BoC communication and supported additional enhancements.
- Fiscal policy:
  - Directors commended prudent fiscal policy in international comparison; Canada enjoys a AAA rating.
  - A somewhat tighter stance this year would support efforts to reduce inflation and rebuild buffers.
  - Directors welcomed the introduction of quantitative fiscal objectives; most suggested adoption of a formal fiscal framework to better anchor policy.
  - Continued coordination between fiscal and monetary policy remains imperative.
- Financial sector and supervision:
  - The financial system is resilient, with banks well capitalized and liquid.
  - 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.
  - 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.
- Structural policies to boost productivity and living standards:
  - 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).
  - 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.
- Climate policy:
  - Directors stressed that carbon pricing is the most cost‑effective way to achieve Canada’s ambitious climate goals.
  - 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.

### Selected economic indicators and key statistics
- 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)
  - Real GDP:
    - 2020: -5.0
    - 2021: 5.3
    - 2022: 3.8
    - 2023: 1.2
    - 2024: 1.3
    - 2025: 2.4
    - 2026: 2.0
    - 2027: 1.8
    - 2028: 1.6
    - 2029: (value not provided)
  - Total domestic demand:
    - 2020: -6.1
    - 2021: 6.5
    - 2022: 5.1
    - 2023: -0.3
    - 2024: 1.4
    - 2025: 2.9
    - 2026: 2.3
    - 2027: 2.1
    - 2028: 1.9
  - Private consumption:
    - 2020: -6.3
    - 2021: 1.7
    - 2022: 2.8
    - 2023: 3.6
    - 2024: 2.7
    - 2025: 2.6
  - Total investment:
    - 2020: -7.0
    - 2021: 14.3
    - 2022: 7.1
    - 2023: -6.0
    - 2024: -0.9
    - 2025: 3.0
  - Net exports, contribution to growth:
    - 2020: 0.3
    - 2021: -1.8
    - 2022: -1.4
    - 2023: 1.5
    - 2024: -0.2
    - 2025: -0.5
  - Output gap 1/ (Percent of potential GDP):
    - 2020: -3.4
    - 2021: 0.8
    - 2022: 0.0
    - 2023: -0.6
    - 2024: -0.1
    - 2025: 0.1

- Unemployment and Inflation
  - Unemployment rate (average) 2/ (Percent):
    - 2020: 9.7
    - 2021: 7.5
    - 2022: 5.4
    - 2023: 6.2
    - 2024: 6.3
    - 2025: 6.0
  - CPI inflation (average):
    - 2020: 0.7
    - 2021: 3.4
    - 2022: 6.8
    - 2023: 3.9
    - 2024: 2.5

- Saving and Investment 3/ (Percent of GDP)
  - Gross national saving:
    - 2020: 20.7
    - 2021: 24.3
    - 2022: 25.0
    - 2023: 23.3
    - 2024: 23.4
    - 2025: 23.1
    - 2026: 22.8
    - 2027: 22.5
    - 2028: 22.2
  - Private saving:
    - 2020: 27.5
    - 2021: 23.6
    - 2022: 21.6
    - 2023: 21.5
    - 2024: 21.2
    - 2025: 21.0
    - 2026: 20.6
    - 2027: 20.3
  - Personal saving:
    - 2020: 32.5
    - 2021: 10.4
    - 2022: 11.0
    - 2023: 14.4
    - 2024: 12.8
    - 2025: 11.2
    - 2026: 10.5
    - 2027: 9.8
    - 2028: 9.9
  - Business saving:
    - 2020: 7.3
    - 2021: 8.7
    - 2022: 10.0
    - 2023: 10.8
    - 2024: 10.3

- Gross domestic investment:
  - 2020: 22.7
  - 2021: 25.4
  - 2022: 24.0
  - 2023: 23.5

- General Government Fiscal Indicators 2/ (NA basis)
  - Revenue:
    - 2020: 41.4
    - 2021: 42.5
    - 2022: 41.1
    - 2023: 41.9
    - 2024: 41.3
    - 2025: 41.2
    - 2026: (value not provided)
  - Expenditures:
    - 2020: 52.4
    - 2021: 45.4
    - 2022: 41.0
    - 2023: 42.2
    - 2024: 42.1
    - 2025: 42.0
    - 2026: 41.8
  - Overall balance:
    - 2020: -10.9
    - 2021: -2.9
    - 2022: -1.2
    - 2023: -1.0
    - 2024: -0.8
    - 2025: -0.7
  - Structural balance 1/:
    - 2020: -8.2
    - 2021: -1.9
    - 2022: -0.4
  - Gross Debt:
    - 2020: 118.2
    - 2021: 113.5
    - 2022: 107.4
    - 2023: 107.0
    - 2024: 104.9
    - 2025: 102.1
    - 2026: 100.1
    - 2027: 98.4
    - 2028: 96.8
    - 2029: 95.2
  - Net debt:
    - 2020: 16.1
    - 2021: 15.6
    - 2022: 13.4
    - 2023: 13.5
    - 2024: 13.6

- Money and Credit (Annual average)
  - Household Credit Growth:
    - 2020: 5.2
    - 2021: 5.0
    - 2022: 3.5
  - Business Credit Growth:
    - 2020: -12.7
    - 2021: 6.4
    - 2022: (value not provided)

- Balance of Payments
  - Current account balance 3/: -2.0 (Percent of GDP)
  - Merchandise Trade balance 3/: -1.1 (Percent of GDP)
  - Export volume (percent change):
    - 2020: -7.7
    - 2021: 4.5
    - 2022: 3.3
    - 2023: 3.1
  - Import volume (percent change):
    - 2020: 8.8
    - 2021: 5.8
    - 2022: 4.3
    - 2023: 4.8
  - Terms of trade:
    - 2020: -3.3
    - 2021: 4.7
    - 2022: 0.5

*IMF press release: Executive Board Concludes 2024 Article IV Consultation with Canada, July 16, 2024.*

---


## References

- [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)

_Source: https://www.imf.org/en/news/articles/2024/07/16/pr24276-canada-imf-exec-board-concludes-2024-art-iv-consult_