In 2024, the Bank of Canada will accelerate the economy with a key rate cut
Economists predict that the coming year could be a watershed year.
Chief economist of one of the largest audit and consulting corporations Deloitte Canada shared her forecast for 2024 for Canada. Dawn Desjardins reported that at the moment the country's economy is experiencing a moderately recessive period. And in order to disperse it, the Bank of Canada will reduce the key rate.
Given the easing of inflationary pressures, the interest rate, according to Desjardins' calculations, will be cut three times during the year and will eventually reach the level of 4.25%. For households, this will primarily mean lower lending rates and increased production, as well as lower deposit rates. So far, inflation in Canada has slowed to 3.1%. However, businesses and consumers still expect to be able to bring it to the promised 2%.
In addition, the economist promises an increase in the unemployment rate from the current rate of 5.8% to over 6%. However, it will be caused by rapid population growth, and therefore there will be no significant weakening in the labor market.
Desjardins' main outlook for 2024 is rather positive. The economy is expected to start the year as slow as the end of 2023, but if the labor market remains strong, the Canadian economy will continue to grow.
