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Canada: 2024 Article IV Consultation-Press Release; and Staff Report
Author:
International Monetary Fund. Western Hemisphere Dept.
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Series:
IMF Staff Country Reports
Volume/Issue:
Volume 2024: Issue 228
Language:
English
Publication Date:
16 Jul 2024
DOI:
https://doi.org/10.5089/9798400279966.002
ISBN:
9798400279966
ISSN:
1934-7685
Pages:
129
Keywords:
investment Canada Act; emissions-reduction goal; further policy guidance; consultation cycle; consultation notice; Housing; Inflation; Migration; Labor markets; Financial sector stability; Global
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The 2024 Article IV Consultation discusses that the Canadian economy appears to have achieved a soft landing: inflation has come down almost to target, while a recession has been avoided, with gross domestic product growth cushioned by surging immigration even as per capita income has shrunk. Housing unaffordability has risen to levels not seen in a generation, with demand boosted by immigration and supply facing continued challenges to expansion. Canada’s recent introduction of quantitative fiscal objectives is welcome and could be followed by adoption of a formal fiscal framework to anchor fiscal policy even more effectively. The authorities’ multipronged approach to address housing affordability is expected to yield results over time, but further efforts will likely be needed at all levels of government to address the large housing supply gap. Boosting Canada’s lagging productivity growth—including by taking steps to promote investment and R&D, harness artificial intelligence and other advanced technologies (within appropriate guardrails), and capitalize on the green transition—is a key priority for the country’s long-term prospects. Given skills gaps and demographic pressures, immigration remains a critical ingredient.
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Cover IMF Staff Country Reports
IMF Staff Country Reports
ISSN:
1934-7685
Publisher:
International Monetary Fund