Conference Board of Canada releases positive national outlook for 2008
 |
Seed Newsvine |
The Conference Board of Canada released highlights of its stronger-than-expected 2008 short-term outlook for Canada. The board says that three factors — the strong Canadian dollar, pressure on retailers from cross-border shoppers, and another cut to the federal goods and services tax — will mean consumer price inflation of just 1.3 per cent this year.
The Conference Board also maintains that there is “plenty of momentum” in the country’s domestic economy and predicts that real final domestic demand will expand by 3.4 per cent this year.
As for interest rates, the Board maintains that the strong domestic economy and lack of inflation will keep monetary policy neutral in 2008. Therefore, the board expects the bank rate to remain unchanged until early 2009. By then, the U.S. economy should be in recovery mode and, as a result, monetary policy is likely to be tighter in both the United States and Canada.
