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Overview – We have raised our assumption for the average US tariff rate that Canadian exporters will face, to a level that will likely push the economy into recession. The downturn should be only moderate if, as we expect, the government steps in with …
27th March 2025
Overview – The near-term economic outlook has brightened, with lower interest rates feeding through and consumption benefitting from the recent strong pace of real income growth. That should help to drive quarterly GDP growth above 2% annualised in the …
18th December 2024
Overview – With the inflation battle all but won, weak GDP growth will force the Bank of Canada into more aggressive action, with a couple of 50bp interest rate cuts to end this year. We expect the Bank to adopt a more measured pace of loosening in 2025, …
25th September 2024
Overview – Below potential GDP growth and falling core inflation will persuade the Bank of Canada to cut interest rates further, with the policy rate settling at 2.5% next year. Lower interest rates should, in turn, drive a recovery in GDP growth from …
26th June 2024
Overview – We expect weak GDP growth of 0.8% this year, and a fall in inflation to less than 2% next year, to persuade the Bank of Canada to cut its policy rate back to 2.5% by mid-2025. A recovery in productivity and looser policy should drive a rebound …
26th March 2024
Overview – Further declines in GDP in the coming quarters mean that the economy is unlikely to grow at all next year. Weak growth and a return in inflation to the 2% target will leave scope for the Bank of Canada to cut interest rates sharply, with the …
7th December 2023
Overview – We expect another few quarters of near-zero GDP growth to lead to an annual gain of just 0.7% next year. Even with higher oil prices, the weakness of economic growth leaves scope for CPI inflation to fall back to the 2% target in 2024. That …
26th September 2023
Overview – Strong immigration and the turnaround in the housing market raise the chance that the economy will avoid recession but, with the Bank of Canada back in hiking mode, we still judge that GDP will contract later this year. Even if recession is …
27th June 2023
Overview – The economy made a strong start to 2023, but we continue to expect a moderate recession this year as high interest rates feed through and the banking issues in the US weigh on exports. The downturn will help to pull CPI inflation to 2% by the …
29th March 2023
Overview – The economy is heading for a moderate recession, as higher interest rates weigh on domestic demand and exports contract amid the global downturn. Weaker demand, together with lower commodity prices and an easing of supply shortages, should …
8th December 2022
Overview – The jump in interest rates and worsening global backdrop leaves the economy facing recession, and elevated debt levels are a downside risk to our forecast for a moderate peak-to-trough fall in GDP of 1.0%. For now, our expectation that …
6th October 2022
Overview – The Bank’s aggressive policy tightening will weigh heavily on domestic demand, with consumption growth set to slow sharply while residential investment plunges back to pre-pandemic levels. There is scope for the economy to avoid recession if …
20th July 2022
Overview – Economic activity should expand at a strong pace this year but, with the Bank of Canada set to tighten policy rapidly, we expect the quarterly pace of GDP growth to slow below potential in 2023, as residential investment falls from its elevated …
21st April 2022
Overview – Despite a weak start to the year, we expect GDP to rise by 3.6% in 2022 due to broad-based gains in consumption, business investment and net trade. Against that backdrop, the Bank of Canada is set to raise interest rates four times in 2022. As …
24th January 2022
Overview – We now expect GDP growth to be 4.8% in 2021, rather than 5.0%, and 3.5% in 2022, down from 4.0%. Worsening labour shortages imply that spare capacity has been rapidly absorbed and point to a sharp acceleration in wage growth. In that …
20th October 2021
Overview – The lifting of restrictions and ongoing policy support should translate into a sustained period of above-potential GDP growth, driven by consumption and business investment. We expect GDP growth of 6.3% in 2021 and 4.0% in 2022, followed by a …
15th July 2021
Overview – The third wave of COVID-19 means that the restrictions on activity will be in place for longer than we assumed, but the economy is poised to recover strongly once vaccinations reach a critical mass, especially with the help of an additional …
8th April 2021
Overview – Despite a rockier start to 2021 than we previously anticipated, we continue to expect the economy to recover strongly from the second quarter onwards, as the vaccine rollout allows restrictions to be lifted. Our forecasts for growth of 4.6% …
14th January 2021
