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Interest Rate Outlook

F: Forecast by TD Economics, September 2025. All forecasts are end-of-period.
Source: Bloomberg, Bank of Canada, Federal Reserve, TD Economics.
Interest Rates 2025 2026 2027
Q1 Q2 Q3F Q4F Q1F Q2F Q3F Q4F Q1F Q2F Q3F Q4F
Canada                        
Overnight Target Rate  2.75 2.75 2.50 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25
3-mth T-Bill Rate  2.62 2.65 2.38 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25
2-yr Govt. Bond Yield  2.46 2.59 2.52 2.55 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50
5-yr Govt. Bond Yield  2.61 2.83 2.80 2.85 2.90 2.90 2.90 2.90 2.90 2.90 2.90 2.90
10-yr Govt. Bond Yield  2.97 3.28 3.25 3.20 3.15 3.15 3.15 3.15 3.15 3.15 3.15 3.15
30-yr Govt. Bond Yield  3.23 3.56 3.75 3.50 3.45 3.45 3.45 3.45 3.45 3.45 3.45 3.45
10-yr-2-yr Govt Spread 0.51 0.69 0.73 0.65 0.65 0.65 0.65 0.65 0.65 0.65 0.65 0.65
U.S.                         
Fed Funds Target Rate  4.50 4.50 4.25 3.75 3.75 3.25 3.25 3.25 3.25 3.25 3.25 3.25
3-mth T-Bill Rate  4.21 4.24 4.03 3.65 3.40 3.15 3.15 3.15 3.15 3.15 3.15 3.15
2-yr Govt. Bond Yield  3.89 3.72 3.55 3.40 3.30 3.25 3.25 3.25 3.25 3.25 3.25 3.25
5-yr Govt. Bond Yield  3.96 3.79 3.60 3.65 3.70 3.70 3.70 3.70 3.70 3.70 3.70 3.70
10-yr Govt. Bond Yield  4.23 4.24 4.05 4.05 4.00 4.00 4.00 4.00 4.00 4.00 4.00 4.00
30-yr Govt. Bond Yield  4.59 4.78 4.67 4.60 4.50 4.50 4.50 4.50 4.50 4.50 4.50 4.50
10-yr-2-yr Govt Spread 0.34 0.52 0.50 0.65 0.70 0.75 0.75 0.75 0.75 0.75 0.75 0.75
Canada - U.S. Spreads                        
Can - U.S. T-Bill Spread -1.59 -1.59 -1.65 -1.40 -1.15 -0.90 -0.90 -0.90 -0.90 -0.90 -0.90 -0.90
Can - U.S. 10-Year Bond Spread -1.26 -0.96 -0.80 -0.85 -0.85 -0.85 -0.85 -0.85 -0.85 -0.85 -0.85 -0.85

 

Foreign Exchange Outlook

F: Forecast by TD Economics, September 2025. All forecasts are end-of-period.
Source: Bloomberg, Bank of Canada, Federal Reserve, TD Economics.

.
Currency Exchange Rate 2025 2026 2027
Q1 Q2 Q3F Q4F Q1F Q2F Q3F Q4F Q1F Q2F Q3F Q4F
Exchange Rate to U.S. Dollar                          
 Euro USD per EUR 1.08 1.18 1.20 1.20 1.20 1.20 1.20 1.20 1.20 1.20 1.20 1.20
 UK Pound USD per GBP 1.29 1.37 1.35 1.36 1.38 1.39 1.40 1.40 1.40 1.40 1.40 1.40
 Japanese Yen JPY per USD 149.9 144.2 142.7 141.3 140.6 139.9 139.2 138.5 137.8 137.1 136.4 135.7
 Chinese Renminbi CNY per USD 7.26 7.16 7.11 7.06 7.01 6.96 6.91 6.86 6.81 6.76 6.71 6.66
Exchange Rate to Canadian Dollar                          
 U.S. Dollar USD per CAD 0.70 0.73 0.72 0.73 0.73 0.74 0.74 0.75 0.75 0.75 0.75 0.75
 Euro CAD per EUR 1.55 1.60 1.66 1.65 1.64 1.63 1.61 1.60 1.60 1.60 1.60 1.60
 UK Pound CAD per GBP 1.85 1.87 1.87 1.87 1.88 1.88 1.88 1.87 1.86 1.86 1.86 1.86
 Japanese Yen JPY per CAD 104.2 105.9 103.1 102.8 103.0 103.2 103.5 103.7 103.6 103.1 102.6 102.1
 Chinese Renminbi CNY per CAD 5.05 5.26 5.13 5.13 5.14 5.14 5.13 5.14 5.12 5.08 5.05 5.01

Commodity Price Outlook

F: Forecast by TD Economics, September 2025. All forecasts are period averages.
Source: Bloomberg, TD Economics, USDA (Haver).
Commodity 2025 2026 2027
Q1 Q2 Q3F Q4F Q1F Q2F Q3F Q4F Q1F Q2F Q3F Q4F
Crude Oil (WTI, $US/bbl) 72 64 65 62 63 65 66 67 68 69 70 70
Natural Gas ($US/MMBtu) 4.20 3.19 3.15 3.30 3.70 4.10 4.10 4.00 4.00 4.00 4.00 4.00
Gold ($US/troy oz.) 2856 3284 3435 3550 3650 3600 3550 3500 3400 3400 3400 3400
Silver ($US/troy oz.) 31.86 33.65 39.00 38.00 37.75 37.50 37.00 37.00 37.00 37.00 37.00 37.00
Copper (cents/lb) 423 432 480 450 460 465 470 475 475 475 475 475
Nickel ($US/lb) 7.06 6.88 6.80 6.85 6.90 6.95 7.00 7.05 7.05 7.05 7.05 7.05
Aluminum (cents/lb) 119 111 118 116 160 116 115 115 113 113 113 113
Wheat ($US/bu) 5.65 5.34 5.19 5.05 5.25 5.35 5.45 5.55 5.55 5.55 5.55 5.55


Canadian Economic Outlook

[Period-Over-Period Annualized Per Cent Change Unless Otherwise Indicated]

F: Forecast by TD Economics, September 2025.
Note: Home price measure shown is the CREA Composite Sale Price.
* Intellectual Property Products. ** CPIX: CPI excluding the 8 most volatile components. *** BoC Inflation: Simple average of CPI-trim and CPI-median.
Source: Statistics Canada, Bank of Canada, Canada Mortgage and Housing Corporation, Haver Analytics, TD Economics.
Economic Indicators 2025 2026 2027 Annual Average 4th Qtr/4th Qtr
Q1 Q2 Q3F Q4F Q1F Q2F Q3F Q4F Q1F Q2F Q3F Q4F 25F 26F 27F 25F 26F 27F
 Real GDP 2.0 -1.6 0.8 1.0 1.5 1.5 1.6 1.6 1.6 1.8 1.8 1.8 1.2 1.1 1.7 0.6 1.5 1.8
 Consumer Expenditure 0.5 4.5 -0.9 1.4 1.3 1.2 1.3 1.4 1.4 1.5 1.5 1.6 2.5 1.2 1.4 1.4 1.3 1.5
Durable Goods             -5.9 10.4 -25.0 1.0 2.0 3.0 3.0 2.0 1.4 1.4 1.5 1.5 0.9 -1.3 1.8 -5.8 2.5 1.5
 Business Investment 0.5 -7.9 -5.0 -0.1 1.1 1.6 1.7 1.3 1.3 1.4 1.4 1.5 -1.6 -0.3 1.4 -3.2 1.4 1.4
Non-Res. Structures -3.9 6.3 -10.0 -2.0 0.0 0.5 1.0 1.1 1.2 1.3 1.3 1.4 -0.6 -1.0 1.2 -2.6 0.6 1.3
Equipment & IPP* 4.9 -19.8 -0.2 1.7 2.2 2.6 2.3 1.4 1.4 1.5 1.5 1.5 -2.6 0.3 1.6 -3.9 2.1 1.5
 Residential Investment -12.2 6.3 7.0 2.0 2.0 1.5 1.5 1.6 1.6 1.6 1.6 1.6 1.8 2.7 1.6 0.5 1.6 1.6
 Govt. Expenditure -1.2 5.7 3.4 3.7 4.1 3.6 3.3 3.3 2.9 2.9 2.9 2.7 3.0 3.8 3.0 2.9 3.6 2.8
 Final Domestic Demand -0.9 3.5 0.3 1.9 2.0 1.8 1.9 1.9 1.8 1.9 1.9 1.9 2.1 1.8 1.8 1.2 1.9 1.8
 Exports                   5.8 -26.8 2.3 2.3 3.1 2.5 1.8 1.7 1.7 1.9 2.0 2.0 -3.0 0.3 1.9 -5.1 2.3 1.9
 Imports                   3.6 -5.1 -3.6 2.8 3.6 2.8 2.2 2.2 2.2 2.2 2.3 2.3 -0.1 1.5 2.3 -0.7 2.7 2.3
 Change in Non-Farm                                    
 Inventories (2012, $Bn) 10.8 30.1 21.6 17.6 15.4 13.9 12.9 12.1 11.6 12.1 12.6 13.1 20.0 13.5 12.3 -- -- --
 Final Sales -3.3 0.5 1.7 2.5 2.4 2.1 2.0 2.0 1.9 1.8 1.8 1.8 2.0 2.1 1.9 0.3 2.1 1.8
 International Current                                    
 Account Balance ($Bn)  -5.3 -84.6 -56.5 -52.7 -51.5 -50.3 -49.7 -49.8 -51.2 -52.4 -53.5 -54.5 -49.8 -50.3 -52.9 -- -- --
% of GDP  -0.2 -2.7 -1.8 -1.6 -1.6 -1.5 -1.5 -1.5 -1.5 -1.5 -1.6 -1.6 -1.6 -1.5 -1.5 -- -- --
 Pre-Tax Corp. Profits 6.4 -13.1 -4.1 3.3 3.2 3.7 4.4 4.3 4.1 4.2 4.3 4.2 2.9 1.5 4.2 -2.2 3.9 4.2
% of GDP  13.4 13.0 12.8 12.8 12.8 12.7 12.8 12.8 12.8 12.8 12.8 12.8 13.0 12.8 12.8 -- -- --
 GDP Deflator (y/y) 3.3 2.2 1.9 1.8 1.7 2.3 2.6 2.5 2.3 2.2 2.1 2.0 2.3 2.3 2.2 1.8 2.5 2.0
 Nominal GDP  5.0 -1.6 2.1 3.9 4.2 4.0 4.0 3.9 3.7 3.9 3.9 3.9 3.6 3.4 3.9 2.3 4.0 3.8
 Labour Force 2.2 1.6 -0.1 -0.6 0.0 0.1 0.1 0.1 0.2 0.2 0.3 0.3 1.8 0.0 0.2 0.8 0.1 0.3
 Employment  2.7 0.4 -0.6 -1.7 0.4 1.0 1.0 1.0 0.8 0.8 0.8 0.8 1.1 0.1 0.9 0.2 0.8 0.8
 Change in Empl. ('000s)  141 20 -33 -92 23 50 50 50 44 44 41 41 235 17 184 35 173 171
 Unemployment Rate (%)  6.6 6.9 7.0 7.3 7.2 7.0 6.8 6.6 6.5 6.3 6.2 6.1 7.0 6.9 6.3 -- -- --
 Personal Disp. Income  3.9 1.3 2.7 1.0 1.4 2.6 3.3 3.5 3.6 3.6 3.5 3.5 4.2 2.1 3.5 2.2 2.7 3.5
 Pers. Savings Rate (%)  6.0 5.0 5.3 4.7 4.3 4.1 4.1 4.1 4.1 4.1 4.1 4.0 5.3 4.1 4.1 -- -- --
 Cons. Price Index (y/y) 2.3 1.8 1.9 2.1 1.9 2.3 2.2 2.1 2.1 2.0 2.0 2.0 2.0 2.1 2.0 2.1 2.1 2.0
 CPIX (y/y)** 2.3 2.6 2.6 2.6 2.3 2.2 2.2 2.1 2.0 2.0 2.0 2.0 2.5 2.2 2.0 2.6 2.1 2.0
 BoC Inflation (y/y)*** 2.8 3.1 3.1 2.9 2.6 2.4 2.3 2.1 2.1 2.0 2.0 2.0 3.0 2.3 2.0 2.9 2.1 2.0
 Housing Starts ('000s) 223 283 270 273 268 257 248 245 247 247 247 247 262 254 247 -- -- --
 Home Prices (y/y) -1.4 -2.1 0.8 -0.2 5.5 6.5 4.8 4.8 4.9 4.9 4.9 4.9 -0.7 5.4 4.9 -0.2 4.8 4.9
 Real GDP / Worker (y/y) 0.4 -0.2 -0.3 0.4 0.8 1.4 1.2 0.7 0.6 0.7 0.8 0.9 0.1 1.0 0.8 0.4 0.7 0.9

 

U.S. Economic Outlook

[Period-Over-Period Annualized Per Cent Change Unless Otherwise Indicated]

F: Forecast by TD Economics, September 2025.
* Intellectual Property Products. ** Non-farm business sector.
Source: Bureau of Labor Statistics, Bureau of Economic Analysis, Census Bureau, TD Economics.
Economic Indicators 2025 2026 2027 Annual Average 4th Qtr/4th Qtr
Q1 Q2 Q3F Q4F Q1F Q2F Q3F Q4F Q1F Q2F Q3F Q4F 25F 26F 27F 25F 26F 27F
 Real GDP -0.5 3.3 2.0 1.1 1.4 2.0 2.2 2.2 2.2 2.2 2.1 2.1 1.8 1.8 2.2 1.5 2.0 2.1
 Consumer Expenditure 0.5 1.6 2.0 0.6 1.2 1.8 2.1 2.0 2.0 2.0 2.0 2.0 2.1 1.5 2.0 1.2 1.8 2.0
Durable Goods             -3.7 2.6 3.6 -2.8 0.5 3.5 4.5 3.5 3.5 3.5 3.5 3.5 3.3 1.6 3.6 -0.1 3.0 3.5
 Business Investment 10.3 5.7 2.8 2.4 2.6 3.6 3.2 3.2 2.9 3.0 3.0 3.0 4.3 3.1 3.1 5.3 3.1 3.0
Non-Res. Structures -2.4 -8.9 -5.0 0.0 1.0 2.0 2.0 2.0 2.5 3.0 3.0 3.0 -3.0 -0.2 2.5 -4.1 1.7 2.9
Equipment & IPP* 14.2 10.1 5.0 3.0 3.0 4.0 3.5 3.5 3.0 3.0 3.0 3.0 6.5 3.9 3.2 8.0 3.5 3.0
 Residential Investment -1.3 -4.7 -6.0 -2.5 1.3 4.7 6.4 6.4 6.3 5.0 4.3 3.9 -1.9 0.8 5.6 -3.7 4.7 4.9
 Govt. Expenditure -0.6 -0.2 -0.1 2.0 0.9 0.9 1.1 1.1 1.1 1.2 1.1 1.2 1.3 1.0 1.1 0.3 1.0 1.2
 Final Domestic Demand 1.5 1.6 1.5 1.0 1.4 2.0 2.2 2.2 2.1 2.1 2.1 2.1 2.1 1.6 2.1 1.4 1.9 2.1
 Exports                   0.4 -1.3 -3.0 0.3 2.1 2.5 3.0 3.0 3.0 3.0 3.0 3.0 0.7 1.1 3.0 -0.9 2.6 3.0
 Imports                   38.0 -29.8 0.0 0.8 2.0 2.9 3.6 3.6 2.5 2.5 2.5 2.5 2.9 -0.4 2.8 -0.6 3.0 2.5
 Change in Private Inventories 160.5 -32.9 13.6 26.9 31.8 36.8 41.7 46.7 46.7 46.7 46.7 46.7 42.0 39.2 46.7 -- -- --
 Final Sales -3.1 6.8 1.2 0.9 1.4 1.9 2.1 2.1 2.2 2.2 2.1 2.1 1.8 1.8 2.1 1.4 1.9 2.1
 Pre-tax Corporate Profits                                    
 Including IVA&CCA -8.7 6.9 -12.2 -10.2 -5.8 10.6 6.9 9.2 8.1 8.9 7.7 5.9 1.3 -1.4 8.2 -6.3 5.0 7.6
% of GDP  13.1 13.1 12.5 12.1 11.8 12.0 12.0 12.1 12.2 12.4 12.5 12.5 12.7 12.0 12.4 -- -- --
 GDP Deflator (y/y) 2.6 2.5 2.9 2.7 2.7 2.8 2.4 2.7 2.4 2.4 2.3 2.3 2.7 2.6 2.3 2.7 2.7 2.3
 Nominal GDP  3.2 5.3 5.7 2.7 5.0 4.5 4.6 4.7 4.5 4.6 4.3 4.6 4.6 4.5 4.5 4.2 4.7 4.5
 Labor Force 5.2 0.3 -0.5 0.5 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 1.5 0.3 0.4 1.3 0.4 0.4
 Non-Farm Employment  1.3 0.7 0.2 -0.2 0.4 0.7 0.8 0.8 0.7 0.5 0.5 0.5 0.9 0.4 0.7 0.5 0.7 0.6
 Change in Non-Farm Empl. ('000s) 521 280 90 -64 160 285 300 300 300 200 200 200 1440 666 1046 827 1045 900
 Unemployment Rate (%)  4.1 4.2 4.3 4.4 4.4 4.3 4.2 4.1 4.0 4.0 4.0 4.0 4.2 4.2 4.0 -- -- --
 Personal Disp. Income  6.2 5.0 2.4 4.5 5.3 4.5 4.8 5.3 5.7 4.6 4.7 4.5 4.4 4.6 5.0 4.5 5.0 4.9
 Pers. Savings Rate (%)  4.3 4.6 4.0 4.3 4.5 4.4 4.5 4.8 5.2 5.3 5.5 5.5 4.3 4.6 5.4 -- -- --
 Cons. Price Index (y/y) 2.7 2.5 2.9 2.9 2.6 3.0 3.0 2.8 2.6 2.4 2.2 2.2 2.7 2.8 2.4 2.9 2.8 2.2
 Core CPI (y/y) 3.1 2.8 3.0 3.1 3.0 3.3 3.1 2.8 2.5 2.3 2.2 2.2 3.0 3.1 2.3 3.1 2.8 2.2
 Core PCE Price Index (y/y) 2.8 2.7 3.0 3.2 3.1 3.2 2.9 2.6 2.3 2.1 2.0 2.0 2.9 3.0 2.1 3.2 2.6 2.0
 Housing Starts (mns)  1.40 1.35 1.32 1.27 1.30 1.33 1.38 1.43 1.46 1.48 1.50 1.52 1.33 1.36 1.49 -- -- --
 Real Output per Hour** (y/y) 1.2 1.5 1.6 1.4 2.1 1.6 1.0 1.1 1.1 1.3 1.4 1.5 1.4 1.4 1.3 1.4 1.1 1.5

 

Economic Indicators: G7 & Europe

F: Forecast by TD Economics, September 2025.
* Share of 2022 world gross domestic product (GDP) at PPP.
Source: National Statistics Agencies, TD Economics.
  2025F 2026F 2027F
Real GDP (Annual Per Cent Change)
G7 (42.4%)* 1.3 1.3 1.7
  U.S. 1.8 1.8 2.2
  Japan 1.1 0.7 0.8
  Euro Area 1.2 0.8 1.4
  Germany 0.2 1.0 1.7
  France 0.5 0.8 1.4
  Italy 0.5 0.5 0.9
  United Kingdom 1.2 0.9 1.5
  Canada 1.2 1.1 1.7
Consumer Price Index (Annual Per Cent Change)
G7 2.2 2.0 2.0
  U.S. 2.7 2.8 2.4
  Japan 3.1 1.9 1.8
  Euro Area 2.0 1.8 1.9
  Germany 1.8 1.7 2.0
  France 1.3 1.9 1.8
  Italy 1.7 1.9 2.0
  United Kingdom 3.0 2.3 2.0
  Canada 2.0 2.1 2.0
Unemployment Rate (Per Cent Annual Averages)
  U.S. 4.2 4.2 4.0
  Japan 2.5 2.3 2.3
  Euro Area 6.4 6.4 6.2
  Germany 6.2 5.6 5.4
  France 7.6 7.2 7.0
  Italy 6.5 7.0 6.8
  United Kingdom 4.7 4.5 4.3
  Canada 7.0 6.9 6.3
 

Global Economic Outlook

[Annual Per Cent Change Unless Otherwise Indicated]

F: Forecast by TD Economics, September 2025.
* Share of 2022 world gross domestic product (GDP) at PPP. Forecast for India refers to fiscal year.
Source: International Monetary Fund, TD Economics.
2022 Share* Forecast
Real GDP (%) 2025F 2026F 2027F
World 100.0 3.1 2.7 2.9
North America 18.9 1.7 1.7 2.1
   United States 15.5 1.8 1.8 2.2
   Canada 1.4 1.2 1.1 1.7
   Mexico 1.9 0.7 1.1 2.1
European Union (EU-27) 14.9 1.4 1.2 1.6
   Euro Area (EU-20) 12.0 1.2 0.8 1.4
        Germany 3.3 0.2 1.0 1.7
        France  2.3 0.5 0.8 1.4
        Italy 1.9 0.5 0.5 0.9
   Other EU Members 2.8 2.5 2.7 2.3
Asia 45.0 4.3 3.7 3.8
   Japan 3.8 1.1 0.7 0.8
   Asian NIC's 3.5 2.6 2.0 2.2
        Hong Kong 0.3 3.2 2.1 2.4
        Korea 1.7 0.5 1.7 2.3
        Singapore  0.4 3.0 2.2 2.4
        Taiwan 1.0 6.1 2.5 2.1
   Russia 2.9 0.9 0.8 0.9
   Australia & New Zealand 1.2 1.8 2.4 2.3
   Emerging Asia 32.8 5.3 4.5 4.7
        ASEAN-5 5.2 4.9 4.8 4.8
        China 18.4 4.8 3.8 4.0
        India** 7.3 6.9 6.2 6.2
Central/South America 5.4 3.1 2.0 2.3
   Brazil 2.3 2.7 1.5 2.1
Other Emerging Markets 12.7 3.4 3.4 3.2
Other Advanced 3.4 1.2 1.4 2.2
   United Kingdom 2.3 1.2 0.9 1.5

 

Long-Term U.S. Economic Outlook

[Period-Over-Period Annualized Per Cent Change Unless Otherwise Indicated]

F: Forecast by TD Economics, September 2025.
* Intellectual property products. ** Non-farm business sector.
Source: Bureau of Labor Statistics, Bureau of Economic Analysis, Census Bureau, TD Economics.
Economic Indicator Annual Average Fourth Quarter / Fourth Quarter
25F 26F 27F 28F 29F 30F 31F 25F 26F 27F 28F 29F 30F 31F
 Real GDP 1.8 1.8 2.2 2.1 2.0 2.0 2.0 1.5 2.0 2.1 2.1 2.0 2.0 2.0
 Consumer Expenditure 2.1 1.5 2.0 2.0 2.1 2.2 2.2 1.2 1.8 2.0 2.0 2.1 2.2 2.2
Durable Goods             3.3 1.6 3.6 3.5 3.5 3.5 3.5 -0.1 3.0 3.5 3.5 3.5 3.5 3.5
 Business Investment 4.3 3.1 3.1 3.0 3.0 3.0 3.0 5.3 3.1 3.0 3.0 3.0 3.0 3.0
Non-Res. Structures -3.0 -0.2 2.5 3.0 3.0 3.0 3.0 -4.1 1.7 2.9 3.0 3.0 3.0 3.0
Equipment & IPP* 6.5 3.9 3.2 3.0 3.0 3.0 3.0 8.0 3.5 3.0 3.0 3.0 3.0 3.0
 Residential Investment -1.9 0.8 5.6 3.9 3.0 2.0 1.7 -3.7 4.7 4.9 3.6 2.6 1.7 1.7
 Govt. Expenditure 1.3 1.0 1.1 1.0 0.8 0.4 0.3 0.3 1.0 1.2 0.9 0.6 0.3 0.3
 Final Domestic Demand 2.1 1.6 2.1 2.0 2.0 2.0 2.0 1.4 1.9 2.1 2.0 2.0 2.0 2.0
 Exports                   0.7 1.1 3.0 3.0 3.0 3.0 3.0 -0.9 2.6 3.0 3.0 3.0 3.0 3.0
 Imports                   2.9 -0.4 2.8 2.5 2.5 2.5 2.5 -0.6 3.0 2.5 2.5 2.5 2.5 2.5
 Change in Private                            
 Inventories 42.0 39.2 46.7 46.7 46.7 46.7 46.7 --- --- --- --- --- --- ---
 Final Sales 1.8 1.8 2.1 2.1 2.0 2.0 2.0 1.4 1.9 2.1 2.1 2.0 2.0 2.0
 Pre-Tax Corporate Profits                            
 Including IVA&CCA 1.3 -1.4 8.2 5.6 4.3 4.4 4.3 -6.3 5.0 7.6 4.4 4.4 4.4 4.1
% of GDP  12.7 12.0 12.4 12.5 12.5 12.5 12.5 --- --- --- --- --- --- ---
 GDP Deflator (y/y) 2.7 2.6 2.3 2.3 2.2 2.3 2.3 2.7 2.7 2.3 2.3 2.2 2.3 2.3
 Nominal GDP  4.6 4.5 4.5 4.5 4.3 4.3 4.3 4.2 4.7 4.5 4.4 4.3 4.3 4.3
 Labor Force 1.5 0.3 0.4 0.5 0.5 0.4 0.4 1.3 0.4 0.4 0.5 0.5 0.4 0.4
 Employment  0.9 0.4 0.7 0.5 0.5 0.5 0.5 0.5 0.7 0.6 0.5 0.5 0.5 0.5
 Change in Empl. ('000s)  1,440 666 1,046 800 800 780 801 827 1,045 900 800 800 780 801
 Unemployment Rate (%)  4.2 4.2 4.0 4.0 4.0 4.0 4.0 --- --- --- --- --- --- ---
 Personal Disp. Income  4.4 4.6 5.0 4.6 4.5 4.5 4.5 4.5 5.0 4.9 4.6 4.5 4.5 4.5
 Pers. Savings Rate (%)  4.3 4.6 5.4 5.9 6.3 6.7 6.9 --- --- --- --- --- --- ---
 Cons. Price Index (y/y) 2.7 2.8 2.4 2.2 2.1 2.1 2.2 2.9 2.8 2.2 2.1 2.1 2.2 2.2
 Core CPI (y/y) 3.0 3.1 2.3 2.2 2.2 2.2 2.2 3.1 2.8 2.2 2.2 2.2 2.2 2.2
 Core PCE Price Index (y/y) 2.9 3.0 2.1 2.0 2.0 2.0 2.0 3.2 2.6 2.0 2.0 2.0 2.0 2.0
 Housing Starts (mns)  1.3 1.4 1.5 1.6 1.6 1.6 1.6 --- --- --- --- --- --- ---
 Real Output per Hour** (y/y) 1.4 1.4 1.3 1.5 1.5 1.5 1.5 1.4 1.1 1.5 1.5 1.5 1.5 1.5

Long-Term Canadian Economic Outlook

[Period-Over-Period Annualized Per Cent Change Unless Otherwise Indicated]

F: Forecast by TD Economics, September 2025.
* Intellectual Property Products. ** CPIX: CPI ex. 8 most volatile components. *** BoC Inflation: Avg. of CPI-trim and CPI-median.
Note: Home price measure shown is the CREA Composite Sale Price.
Source: Statistics Canada, Bank of Canada, CMHC, CREA, TD Economics.         
            Economic Indicator                 Annual Average 4th Quarter / 4th Quarter
25F 26F 27F 28F 29F 30F 31F 25F 26F 27F 28F 29F 30F 31F
  Real GDP 1.2 1.1 1.7 1.8 1.7 1.7 1.7 0.6 1.5 1.8 1.7 1.7 1.7 1.7
Consumer Expenditure 2.5 1.2 1.4 1.6 1.6 1.7 1.7 1.4 1.3 1.5 1.6 1.7 1.7 1.7
Durable Goods             0.9 -1.3 1.8 1.5 1.6 1.7 1.7 -5.8 2.5 1.5 1.6 1.6 1.7 1.7
Business Investment -1.6 -0.3 1.4 1.5 1.6 1.6 1.7 -3.2 1.4 1.4 1.5 1.6 1.7 1.7
Non-Res. Structures -0.6 -1.0 1.2 1.4 1.6 1.6 1.7 -2.6 0.6 1.3 1.5 1.6 1.6 1.7
Equipment & IPP* -2.6 0.3 1.6 1.6 1.6 1.7 1.7 -3.9 2.1 1.5 1.6 1.6 1.7 1.7
Residential Investment 1.8 2.7 1.6 1.6 1.7 1.7 1.7 0.5 1.6 1.6 1.6 1.7 1.7 1.7
Govt. Expenditure 3.0 3.8 3.0 2.6 2.2 2.0 1.9 2.9 3.6 2.8 2.4 2.1 1.9 1.8
    Final Domestic Demand 2.1 1.8 1.8 1.8 1.8 1.8 1.7 1.2 1.9 1.8 1.8 1.8 1.7 1.7
Exports                   -3.0 0.3 1.9 2.1 2.3 2.4 2.4 -5.1 2.3 1.9 2.2 2.3 2.4 2.5
Imports                   -0.1 1.5 2.3 2.3 2.4 2.5 2.5 -0.7 2.7 2.3 2.4 2.4 2.5 2.5
Change in Non-Farm                            
Inventories (2012 $Bn) 20.0 13.5 12.3 13.3 13.7 14.1 14.5 -- -- -- -- -- -- --
   Final Sales 2.0 2.1 1.9 1.8 1.8 1.7 1.7 0.3 2.1 1.8 1.8 1.8 1.7 1.7
International Current                            
Account Balance ($Bn)  -49.8 -50.3 -52.9 -56.5 -59.0 -61.1 -63.0 -- -- -- -- -- -- --
% of GDP  -1.6 -1.5 -1.5 -1.6 -1.6 -1.6 -1.6 -- -- -- -- -- -- --
Pre-Tax Corp. Profits 2.9 1.5 4.2 4.2 4.0 4.0 3.9 -2.2 3.9 4.2 4.1 4.0 3.9 3.9
% of GDP  13.0 12.8 12.8 12.8 12.9 12.9 12.9 -- -- -- -- -- -- --
  GDP Deflator (y/y) 2.3 2.3 2.2 2.0 2.0 2.0 2.0 1.8 2.5 2.0 2.0 2.0 2.0 2.0
  Nominal GDP  3.6 3.4 3.9 3.8 3.8 3.8 3.7 2.3 4.0 3.8 3.8 3.8 3.8 3.7
  Labour Force 1.8 0.0 0.2 0.4 0.6 0.6 0.6 0.8 0.1 0.3 0.5 0.6 0.6 0.6
  Employment  1.1 0.1 0.9 0.8 0.7 0.6 0.6 0.2 0.8 0.8 0.8 0.6 0.6 0.6
  Change in Empl. ('000s)  235 17 184 163 152 134 131 35 173 171 167 137 133 129
  Unemployment Rate (%)  7.0 6.9 6.3 6.0 5.9 5.9 5.9 -- -- -- -- -- -- --
  Personal Disp. Income  4.2 2.1 3.5 3.5 3.5 3.4 3.4 2.2 2.7 3.5 3.5 3.4 3.4 3.4
  Pers. Savings Rate (%)  5.3 4.1 4.1 4.0 3.8 3.5 3.1 -- -- -- -- -- -- --
  Cons. Price Index (y/y) 2.0 2.1 2.0 2.0 2.0 2.0 2.0 2.1 2.1 2.0 2.0 2.0 2.0 2.0
  CPIX (y/y) ** 2.5 2.2 2.0 2.0 2.0 2.0 2.0 2.6 2.1 2.0 2.0 2.0 2.0 2.0
  BoC Inflation (y/y) *** 3.0 2.3 2.0 2.0 2.0 2.0 2.0 2.9 2.1 2.0 2.0 2.0 2.0 2.0
  Housing Starts ('000s) 262.5 254.4 246.9 246.8 242.6 241.6 241.1 -- -- -- -- -- -- --
  Home Prices (y/y) -0.7 5.4 4.9 4.3 3.3 3.2 3.2 -0.2 4.8 4.9 3.7 3.2 3.2 3.2
  Real GDP / Worker (y/y) 0.1 1.0 0.8 1.0 1.0 1.1 1.1 0.4 0.7 0.9 0.9 1.1 1.1 1.1

 

Long-Term Interest Rates

[Period-Over-Period Annualized Per Cent Change Unless Otherwise Indicated]

F: Forecast by TD Economics, September 2025.
*Upper bound of target range. Note: Annual averages are the average of the four quarterly end-of-period forecasts.
Source: Bank of Canada, Bloomberg, Statistics Canada, TD Economics.
Interest Rates Annual Average End of Period
25F 26F 27F 28F 29F 30F 31F 25F 26F 27F 28F 29F 30F 31F
U.S. FIXED INCOME                            
   Fed Funds Target Rate (%)* 4.35 3.44 3.25 3.25 3.25 3.25 3.25 3.75 3.25 3.25 3.25 3.25 3.25 3.25
   3-mth T-Bill Rate (%) 4.15 3.28 3.15 3.15 3.15 3.15 3.15 3.65 3.15 3.15 3.15 3.15 3.15 3.15
   2-yr Govt. Bond Yield (%) 3.81 3.28 3.25 3.25 3.25 3.25 3.25 3.40 3.25 3.25 3.25 3.25 3.25 3.25
   5-yr Govt. Bond Yield (%) 3.92 3.70 3.70 3.70 3.70 3.70 3.70 3.65 3.70 3.70 3.70 3.70 3.70 3.70
   10-yr Govt. Bond Yield (%) 4.29 4.01 4.00 4.00 4.00 4.00 4.00 4.05 4.00 4.00 4.00 4.00 4.00 4.00
  10-yr-2-yr Govt. Spread (%) 0.48 0.73 0.75 0.75 0.75 0.75 0.75 0.65 0.75 0.75 0.75 0.75 0.75 0.75
CANADIAN FIXED INCOME                            
   Overnight Target Rate (%) 2.70 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25
   3-mth T-Bill Rate (%) 2.61 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25
   2-yr Govt. Bond Yield (%) 2.53 2.50 2.50 2.50 2.50 2.50 2.50 2.55 2.50 2.50 2.50 2.50 2.50 2.50
   5-yr Govt. Bond Yield (%) 2.86 2.90 2.90 2.90 2.90 2.90 2.90 2.85 2.90 2.90 2.90 2.90 2.90 2.90
  10-yr Govt. Bond Yield (%) 3.25 3.16 3.15 3.15 3.15 3.15 3.15 3.20 3.15 3.15 3.15 3.15 3.15 3.15
  10-yr-2-yr Govt. Spread (%) 0.72 0.66 0.65 0.65 0.65 0.65 0.65 0.65 0.65 0.65 0.65 0.65 0.65 0.65

 

Home Sales and Price Outlook

[Annual Average Growth, %]

Source: CREA, CMHC, TD Economics. Forecasts by TD Economics as of September 2025.
Provinces Home Sales Home Prices
2025F 2026F 2027F 2025F 2026F 2027F
 National -1.0 10.9 6.5 -0.7 5.4 4.9
Newfoundland & Labrador 6.7 3.9 3.3 7.6 3.6 3.0
Prince Edward Island 6.6 4.2 2.3 3.0 5.4 3.5
Nova Scotia 0.7 9.1 5.9 5.0 5.3 3.6
New Brunswick 1.7 6.3 2.4 6.7 5.5 4.2
Québec 9.2 2.6 0.8 8.3 5.9 4.3
Ontario -4.0 15.2 8.4 -3.0 3.1 4.4
Manitoba 2.7 4.5 3.3 7.0 5.3 4.3
Saskatchewan 0.7 7.2 6.3 9.3 6.5 5.1
Alberta -5.6 9.5 7.0 3.5 3.6 4.3
British Columbia -4.2 18.2 10.4 -3.1 3.5 3.6

 

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