Canadian real gross domestic product (GDP) growth will accelerate slightly to 2.8 per cent this year, according to the Conference Board’s Canadian Outlook for Winter 2008.

“As long as the United States averts a recession, Canada’s domestic economy will remain largely impervious to woes afflicting our largest trading partner,” said Pedro Antunes, director, national and provincial forecast.

Canadian domestic demand, which averaged 4.3% growth annually for four years, is still forecast to expand by more than 3% in each of the next two years, according to the Board. Many of the positive conditions that have stimulated Canada’s domestic economy remain in place, such as strong job growth and wage gains. As well, recent changes, such as tax reductions announced by the federal government in November 2007, will maintain the momentum.

The Board’s outlook for overall corporate profits is bullish for 2008, thanks largely to high resource prices. Strong profitability, combined with announced reductions in corporate taxes, appears to have reignited private investment by firms.

The possibility of a U.S. recession poses the greatest downside risk to the forecast. Nonetheless, the Board expects the U.S. to skirt a recession, thanks mainly to continued growth in consumer spending and investment spending that has held up well in spite of the turmoil in American housing and financial markets.