However, slowing U.S. growth will have a clear impact on growth in the Canadian economy in the near term. The Bank is projecting that net exports will subtract 1.3 percentage points from growth this year and 0.7 percentage points next year, and that net exports will not contribute to growth in 2008.
Overall, the Bank projects 2.8 per cent growth of real GDP in 2006, slowing to 2.5 per cent in 2007, but coming back up to 2.8 per cent in 2008. In our Report last week, we said that the Bank currently judges that the economy is operating with a slight amount of excess demand.