The Canadian economy shrank in the second quarter. Economists anticipate that weakness will continue for the rest of the year and into 2024.
The Bank of Canada’s recent business outlook survey supported this expectation. It showed business sentiment continued to weaken in the third quarter as companies said they expect sales growth to slow over the coming year.
The pace of consumer spending has also slowed. New retail Canadian retail sales fell 0.1 per cent to $66.1 billion in August as sales at new and used car dealers fell for the month, Statistics Canada said Friday.These trends are expected to continue as the effect of previous rate hikes takes hold on the economy, pinching the pocketbooks of more Canadians and businesses.
Most economists expect these weaker economic and tighter financial conditions to eventually bring inflation back down to two per cent. On the international front, the global economy faces some uncertainty amid the Israel-Hamas conflict, which risks destabilizing the Middle East.
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