Deloitte Canada's latest economic forecasts expect the pace of growth will ease in 2025 under the weight of Canadian mortgage renewals.
Canada ’s inflation rate accelerated to 2.9 per cent in May from 2.7 per cent the previous month, driven by higher prices for services. Anne Gaviola has more on what’s stressing Canadian households and what this means for the country’s central bank and interest rate expectations this summer.cuts to pick up in 2025, but not enough for many Canadian homeowners to avoid feeling the pinch of upcoming mortgage renewals.
The Bank of Canada delivered its first interest rate cut in more than four years earlier this month, dropping its policy rate by a quarter of a percentage point to 4.75 per cent. “Yes, interest rates are going to go down, but we still have a big hump for these households that are going to be renegotiating,” Desjardins says.
Deloitte Canada meanwhile expects that the country will avoid a recession during the current economic downturn. Bank of Canada governor Tiff Macklem echoed those expectations in a speech to the Winnipeg Chamber of Commerce on Monday, saying it looked like the economy was so far on track for the so-called “soft landing.”The Deloitte forecast calls for a slight uptick in the unemployment rate to an average of 6.3 per cent in the latter half of 2024, up from May’s levels of 6.2 per cent.
Real GDP per capita has declined in six of the last seven quarters, Desjardins notes, as a growing population masks gaps in productivity.Since 2014, productivity growth has been “essentially flat,” according to Deloitte Canada. At the same time, it’s costing Canadian businesses more money for the same levels of economic output — unit labour costs are up 30 per cent over the past decade, the report says.
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