This quarterly economic forecast provides highlights of the Canadian Outlook report, which presents the short-term national outlook.
Document Highlights
Inflation is proving to be a stickier problem for all concerned. Fed by pandemic-spending on goods rather than services, inflation has been inflamed by war in the Ukraine and supply chain disruptions.
Central banks worldwide have had to accelerate their rate hike plans while still hoping to negotiate a tricky soft landing for their respective economies. We are not expecting an economic contraction in Canada, but the risks are creeping up.
Higher commodity prices are a saving grace for primary producers in Canada, boosting profits, but other sectors will have to cope with higher borrowing costs and slower export growth to the U.S.
Employment markets are in good shape, and there remains strong demand for skills at all levels, but there is not much underutilized labour left to tap Wage growth will lag price growth this year.
Interest rate hikes have finally tipped the overheated housing market over the edge. Prices are on their way down, and starts will ease from recent highs.
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