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Economic Outline

Economic Indicators

For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

Following the unprecedented global crisis prompted by the spread of the COVID-19 pandemic - which led to the largest economic contraction since 1945 - the Canadian economy rebounded in 2021, recording an estimated GDP growth of 5.7%. Rising global oil prices helped the recovery, together with the easing of containment measures that supported internal demand. The IMF expects the country to grow faster than the pre-pandemic trend, with a forecasted growth of 4.9% this year and 2.6% in 2023, although uncertainty remains at global level due especially to the insurgence of the Omicron variant of the virus.

After skyrocketing in 2020, Canada’s debt-to-GDP ratio decreased moderately to 109.9% in 2021 despite the fact that the government increased its borrowing in order to make the necessary temporary investments to stabilize the national economy amidst the extraordinary circumstances of the COVID-19 pandemic. The IMF expects the debt to follow a downward trend in 2022 (103.9%) and 2023 (100.2%). Similarly, the general government balance recorded a deficit of 6.6% in 2021, although further withdrawal of pandemic support measures should contribute to a reduction of the deficit (projected at 2.7% this year and 1% in 2023). In the 20 years before the pandemic, goods inflation averaged only 1.4%. However, according to the latest figures by the Bank of Canada, supply constraints have led to higher inflation: the average inflation rate of goods in 2021 has been 4.4%, much higher than that of services, which has been 2.1%. Inflation should ease as energy price pressures abate and supply bottlenecks are resolved through 2022, with an IMF forecast of 2.6% (followed by 2% the year after).

After touching record lows, the unemployment rate jumped due to the pandemic. In 2021, the unemployment rate remained elevated (7.7%) and over a quarter of those unemployed have been out of work for half a year or more (up from 16% before the pandemic). Strong output growth will support increased labour demand and help pull unemployment down towards pre-pandemic levels: the IMF projects a gradual decrease, at 5.7% this year and 4.9% in 2023. Although Canadians enjoy a high per capita GDP (estimated at USD 51,713 in 2021), 1 in 7 (or 4.9 million) people in Canada live in poverty.

 
Main Indicators 201920202021 (e)2022 (e)2023 (e)
GDP (billions USD) 1,741.581,644.04e2,015.982,189.792,306.07
GDP (Constant Prices, Annual % Change) 1.9-5.3e4.74.12.8
GDP per Capita (USD) 46,400e43,295e52,79156,74059,126
General Government Balance (in % of GDP) 0.3-8.1e-6.6-2.7-1.0
General Government Gross Debt (in % of GDP) 86.8117.5e109.9103.9100.2
Inflation Rate (%) 1.90.7e3.45.62.4
Unemployment Rate (% of the Labour Force) 5.79.6e7.75.74.9
Current Account (billions USD) -35.71-29.8910.564.63-17.62
Current Account (in % of GDP) -2.1-1.80.50.2-0.8

Source: IMF – World Economic Outlook Database, 2016

Note: (e) Estimated Data

 
Monetary Indicators 20162017201820192020
Canadian dollar (CAD) - Average Annual Exchange Rate For 1 GBP 1.791.671.731.631.72

Source: World Bank, 2015

 

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Latest Update: September 2022

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