What happened: The federal government's 2019 budget holds slightly lower growth expectations for Canada's economy.
Why it matters: Canada’s economic performance has helped support massive federal spending. Forecasts show the country will have to manage an economic slowdown.
Despite a global economic slowdown, Canada expects to lead the G7 in economic growth this year and next alongside the United States.
That pace of growth, however, is expected to fall more than a full percentage point below the 3% clip the country enjoyed in 2017.
Based off an average of 14 private sector forecasts, Canada’s economy is expected to see real gross domestic product (GDP) growth of 1.8% for 2019, and 1.6% for 2020. The forecast for this year is a revision downward from the government’s fall economic update, which anticipated 1.9% growth this year.
Also revised downward is government’s GDP inflation outlook. Citing trade impacts from lower forecasted crude oil prices, GDP inflation is expected to register at 1.6% in 2019, down from a previously forecasted rate of 2%.
Despite the downward revisions, the federal government expects Canada economy to strengthen in the latter half of this year.
Within the G7, Canada will rank second to the United States, which is projected to see real GDP growth of 2.2% each year.
Government also expects to see Canada’s debt-to-GDP ratio decline over the next five years to reach 28.6% by 2023-24.