Results from the Market Participants Survey for the first quarter of 2024, conducted from March 7 to 15, 2024, have been released, providing insights into the economic outlook for Canada. The survey, based on questionnaire responses from approximately 30 financial market participants, revealed various forecasts and probabilities regarding GDP growth, inflation, monetary policy, and financial assets.
According to the survey, respondents provided their forecasts for real GDP growth in Canada. The median forecast for the end of 2024 is 1.0%, with a 25th percentile forecast of 0.5% and a 75th percentile forecast of 1.3%. When asked about the probability of GDP growth falling within specific ranges, respondents indicated varying levels of confidence, with the majority foreseeing growth between 1.01% to 2.00% by the end of 2024.
In terms of risks to the growth outlook, respondents identified factors that could affect the Canadian economy positively or negatively. The top upside risks included a strong housing market, easing financial conditions, and higher commodity prices, while the top downside risks comprised a weaker housing market, tightening financial conditions, and increased geopolitical risks.
Regarding inflation, respondents provided forecasts for annual total CPI inflation in Canada. The median forecast for the end of 2024 is 2.3%, with a 25th percentile forecast of 2.2% and a 75th percentile forecast of 2.5%. Additionally, respondents estimated the probabilities of inflation falling within specific ranges, with the majority expecting inflation to range between 2.01% to 3.00% by the end of 2024.
On the topic of monetary policy, respondents shared their forecasts for the Bank of Canada's policy interest rate, with varying projections for the coming years. The survey also inquired about the balance of risks around these forecasts, with respondents indicating different perceptions of the potential paths for the policy interest rate.
In terms of financial assets, respondents provided point estimates for various indicators, including Canadian bond yields, oil prices per barrel, and the value of the Canadian dollar. These estimates shed light on market expectations for these key financial assets.
The survey results offer valuable insights into the sentiments and expectations of financial market participants regarding the Canadian economy for the first quarter of 2024.