Deloitte Canada forecasts economic growth in 2024 with the Bank of Canada lowering its key interest rate below three percent by mid-2025. The report predicts a moderate economic expansion despite softer labor market conditions and the impact of higher borrowing costs.
Deloitte Canada expects economic growth to pick up next year as it forecasts the Bank of Canada to cut its key interest rate below three per cent by mid-2025.
“We do think that we're going to be in for a decent year next year,” said Dawn Desjardins, chief economist at Deloitte Canada. “Yes, the labour market has softened, but I don’t think we’re in any kind of crisis in the labour market at this time.” Desjardins said the forecast aligns with the central bank’s own projections. There are a number of factors on the horizon that may pose increased risk to inflation, she said, such as climate change.
“We’ll see inflation coming down and interest rates coming down. So those are two powerful factors that will support an improvement in confidence both from the consumer side as well as the business side as we go through next year,” she said.“Lower rates will ease the burden on the highly indebted household sector sufficiently to support a pickup in spending and a housing market recovery,” it said in the report. “After two years of subpar growth, we look for the economy to hit its stride in 2025.
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