The Bank of Canada held interest rates steady in September but Canadians shouldn’t expect any cuts until we’re into 2024, a recent report suggested.
A quarterly report from professional services firm RSM Canada explained that the country’s economy is steadily cooling after months of higher inflation and there are no expectations of a recession for this year. However, a recession could happen in the second half of 2024, which means the earliest the central bank would cut interest rate cuts will be the second quarter of next year.
RSM lowered the probability of a recession over the next 12 months to 60 per cent from 75 per cent. It also noted that inflation has declined to 2.8 per cent, the lowest among G7 countries and within the bank’s target rage. That points to the idea that we’ve reached peak interest rates in Canada.
Meanwhile, the Canadian economy will remain steady in the last quarter of 2023, RSM said, with a slowdown continuing into the first half of next year.
“The Canadian economy has displayed remarkable resilience this year, defying expectations of a downturn. While we may muddle through the rest of the year with slower growth, Canada will likely avoid a recession this year.,” says Tu Nguyen, economist for RSM Canada.