The Canadian Chamber of Commerce is forecasting another good year for the Canadian economy. For 2003 as a whole, it says growth in real gross domestic product is expected to average around 3.2%.

“We expect that the Canadian economy will continue to lead the G-7 economies in terms of growth in the coming year,” said Nancy Hughes Anthony, president and CEO of the Canadian Chamber of Commerce, in a news release.

In its 2003 Economic Outlook, the Canadian Chamber expects that while consumer spending on durable goods is expected to slow, expenditure in other areas, including services, will pick up most of the slack.

As well, exports will continue to benefit from firmer economic growth in the United States.

In terms of interest rates, the Canadian Chamber expects the Bank of Canada to keep interest rates steady until the spring of 2003, and it is projecting rates to rise by 125 basis points by the end of 2003. The projected widening in Canada-U.S. interest rate spreads will also lend support to the Canadian dollar. By the end of 2003, the Canadian dollar is expected to appreciate to 67 U.S. cents.

“There are risks to our forecast such as a delay in the economic recovery in the United States, possible military action against Iraq and the lingering uncertainty around the cost of the Kyoto Protocol,” said Hughes Anthony. “Concern about these risks is clouding the outlook for the Canadian economy in 2003.”