Ontario’s economy will grow at an average annual rate of 2.1 percent from 2014 to 2035, down from 2.6 percent in the past 20 years, according to a government forecast.
Annual inflation in Canada’s most populous province is forecast to average 2 percent over the same time frame, down from 3 percent, the Liberal government said in an economic outlook released today.
The cooling economy is largely due to an aging society that will see people aged 65 and older grow to nearly 24 percent of the population in the next two decades from 15 percent in 2013. Growth in the working age population is forecast to slow to 0.5 percent annually from 1.5 percent in the last 40 years, the report said.
The province will trail 2.4 percent average annual growth in the U.S., its largest trading partner, over the next 20 years and global growth of 3.1 percent, the report projects.
The Canadian dollar will stay in a range of 90 to 100 U.S. cents in the period, above its 40 year average of 80 U.S. cents, making Ontario’s manufacturing exports less competitive than in the past, the report said.