Despite the weaker-than-expected rise in GDP in February, first-quarter growth still looks to be close to 2.5% annualised. The weaker flash estimate for March points to less momentum going into the second quarter, however, supporting our forecast for GDP to be broadly unchanged. With GDP growth softening, the risks to the economy from leaving interest rates higher for longer are growing. Alongside the downward trend in core inflation, we expect that will provide the Bank of Canada enough reason to cut interest rates at its next meeting in June.
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