Building on solid growth, real GDP is projected to accelerate through 2015, driven by rising exports and business investment. Exports will be supported by stronger foreign-market growth and recent currency depreciation. Business investment should strengthen with improved demand, to boost capacity and cost competitiveness. Activity should slow somewhat in 2016 as higher interest rates begin to bite, consumption growth slows to reduce household indebtedness and housing investment eases.With economic slack fully absorbed, inflation is projected to return to 2% after falling temporarily in 2015.
Monetary accommodation will need to be gradually withdrawn to counter inflationary pressures. The projection assumes this will begin around mid-2015. Fiscal consolidation should progress as planned, and provincial governments should continue with reforms to manage growth in health-care expenditures. Should housing-related risks increase further, additional macro-prudential measures may be required to ensure financial stability.
Note: All data definitions based on internationally comparable standards and may differ in specific cases from common national definitions.