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Potential Output in Canada: 2019 Reassessment

Dany Brouillette, Julien Champagne, Carol Khoury, Natalia Kyui, Jeffrey Mollins and Youngmin Park

No 2019-10, Staff Analytical Notes from Bank of Canada

Abstract: Potential output is expected to grow on average at 1.8 per cent over 2019–21 and at 1.9 per cent in 2022. While the contribution of trend labour input to potential output growth is expected to decrease between 2019 and 2022, the contribution of trend labour productivity is projected to increase. Relative to the April 2018 reassessment, the profile for potential output growth rates is similar, albeit revised slightly down in 2020 and 2021. Underlying this new profile are negative revisions to the business investment outlook relative to April 2018 that are mostly offset by stronger projections for population growth. Based on various alternative scenarios, the range for potential output growth estimates widens from 1.5 to 2.1 per cent in 2019 to 1.3 to 2.5 per cent in 2022.

Keywords: Labour markets; Potential output; Productivity (search for similar items in EconPapers)
JEL-codes: E00 E22 E23 E24 E37 E6 (search for similar items in EconPapers)
Pages: 11 pages
Date: 2019
New Economics Papers: this item is included in nep-eff and nep-mac
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