Macroeconomic Outlook

Amid a sizeable trade shock and lingering uncertainty, the economy’s growth outlook is running far softer than most forecasters predicted.

The threat of significant international trade disruptions is overshadowing what would have been a substantially improving Canadian economy.

Canada’s economic growth challenges are expected to ease as the Bank of Canada continues to lower interest rates—but not right away, and longer-run challenges remain.

The Canadian economy has continued to underperform global peers with declines in per-capita output in seven of the last eight quarters.

The global economic growth backdrop has shown signs of improvement, but Canada’s economy continues to underperform.

The Canadian economy is still slowing as the lagged impact of earlier interest rate increases materialize. Gross domestic product edged higher in Q4 2023 but once again not fast enough to keep up with surging population growth. Per-person output (a key indicator of household living standards) fell for a sixth straight quarter (by our count) […]

The global economic growth backdrop has continued to slow as the lagged impact of aggressive central bank interest rate hikes continue to build alongside a continued squeeze on household purchasing power from the earlier rise in food and energy prices.

Headwinds from higher interest rates and a slowing global economy are building. Canadian GDP edged 0.2% lower in Q2 of this year and early reports are pointing to another decline in Q3. Some factors that weighed on output in Q2 will prove ‘transitory’—including disruptions due to wildfires and a strike by federal workers in April. […]

In both Canada and the U.S., GDP continued to grow in Q1—and consumers kept spending. But the surge in interest rates will continue to take a toll.

Economic growth has been more resilient than feared in the wake of aggressive interest rate increases last year.

The Canadian economy continues to inch closer to a recession in 2023.

We expect the coming downturn in Canada will be ‘moderate’ by historical standards. – RBC Economics