Our projection for growth implies that this excess demand would be eliminated by mid-2007, and that the economy should then remain near its production potential through to the end of 2008. Overall, the Canadian economy has performed remarkably well when you consider that it is continuing to adjust to a number of powerful global forces.
These include the rise to prominence of China and India, which has led to both stronger global demand for many Canadian goods and services, as well as increased competition for some Canadian firms. In turn, strong global demand has led to increases in most, but not all, commodity prices, and to an associated rise in the Canadian-dollar exchange rate.