The Conference Board of Canada has lowered its forecast for economic growth this year after falling in the second quarter.
The think tank now expects real gross domestic product (GDP) to grow 5.1% in 2021, compared to its previous forecast in July of 6.7%. The management board’s growth forecast for 2022 remains unchanged at 4.4%.
However, the board says that economic growth will slow towards the end of next year, with annual gains of 1.6-1.7% for 2023 and beyond, as the economic stimulus fades.
The latest report says that growth will come this year and next as consumers spend their savings. Rising oil prices are also expected to support the recovery in the oil field.
However, the report says that vaccine distribution continues to be a challenge in many other countries and that the result has resulted in weaker demand for Canadian agricultural, mining, manufacturing and energy products.
The spread of the COVID-19 delta variant even in countries with high vaccination rates remains the greatest risk to the outlook for the global economy.
Statistics Canada said in August that Canada’s economy contracted at an annualized rate of 1.1% in the second quarter, the worst quarterly result since the pandemic began. The agency also said its first estimate for July was a 0.4% decline for the month.