To fight inflation, the Financial institution of Canada escalated the important thing rate of interest from close to zero in March 2022 to the present 5 p.c.
With inflation now cooling, Deloitte predicts rate of interest cuts might start as early as June, aligning with the expectations of many economists for fee reductions in mid-2024.
Regardless of these optimistic indicators, Deloitte forecasts Canada’s economic system to stay comparatively stagnant in 2024, significantly in its first half, with actual GDP progress estimated at one p.c for the 12 months, bettering to 2.9 p.c in 2025.
This forecast relies on a number of assumptions, together with robust GDP progress within the US, easing inflationary pressures, anticipated fee cuts by the Financial institution of Canada, and continued inhabitants progress by way of immigration, which helps demand.
Current knowledge from Statistics Canada helps a cautious optimism, with GDP progress of 0.6 p.c in January and a preliminary estimate of 0.4 p.c progress in February. The anticipated financial restoration hinges on the anticipated rate of interest cuts, contingent upon additional moderation of inflation.
