![]() ![]() Still, the report noted that one of the "wild cards" in the forecast is the Canadian labour market, which has remained tight despite concerns about an economic slowdown. Deloitte said goods sensitive to interest rates, such as household furnishings and appliances, will be hit hardest, and that discretionary spending on services such as communication, recreation, accommodation and food will also decline.ĭeloitte now expects real GDP growth to fall in the first and second quarters of the year, with zero growth predicted for the third quarter this year. Unfortunately, interest payments are set to continue to increase over the coming year, squeezing household budgets and leading to yet more declines in consumer spending."Ĭonsumer spending has already dropped off, but the declines will not be felt equally across all categories. "Given the increase in interest payments, it’s not terribly surprising that real household spending fell in the third quarter. "Households are being battered by the double whammy of high inflation and rising borrowing costs," the report said. That, along with slowing economic growth in the U.S., "will hit Canada hard", the Deloitte report said. Interest payments on household debt in Canada have since soared, increasing by 16.2 per cent on annual basis in the third quarter of the year, the largest increase on record. ![]() At the time the forecast was released, the Bank of Canada had hiked its benchmark interest rate by 300 basis points.īut the central bank wasn't done in its effort to crackdown on inflation, and it raised the benchmark rate an additional 100 basis points, bringing the overnight rate to its current position of 4.25 per cent. "While we were previously projecting a recession in the fall of last year, the conditions have worsened a bit and so we're projecting a slightly longer recession now."ĭeloitte had previously forecast in September that Canada would enter a short-lived recession, with growth stalling in the first quarter of 2023 before returning to positive territory in the second quarter of the year. "It's fair to say that 2023 is shaping to be a rocky year for the Canadian economy," Deloitte Canada's National Economic Advisory Leader Trevin Stratton said in an interview with Yahoo Finance Canada. economy will drag down economic growth in Canada for three consecutive quarters, resulting in a 0.9 per cent contraction in GDP growth in 2023. ![]() economy enters a slowdown, according to a new report from Deloitte Canada.ĭeloitte Canada's latest Economic Outlook, released on Tuesday, says that the impact of rising interest rates and a slowing U.S. (THE CANADIAN PRESS/Sean Kilpatrick)Ĭanada will enter a deeper recession than previously expected this year as the Bank of Canada's rapid interest rate hikes take hold and the U.S. Technology fell 1.7%, while consumer staples fell 1.2%, weighed down by a 2.2% decline in shares of retailer Loblaw Companies Ltd after the company reported quarterly earnings.Deloitte Canada's latest Economic Outlook, released on Tuesday, says that the impact of rising interest rates and a slowing U.S. Rogers Communications Inc shares also climbed, ending up 2.8%, after the company raised its annual forecasts for adjusted core earnings and free cash flow. Healthcare jumped 4%, helped by a gain of 15.9% for shares of Tilray Brands Inc after the cannabis producer reported quarterly revenue that beat analyst estimates. The Toronto market's heavily-weighted financials sector rose 0.3% and industrials were up 0.6%. It discussed delaying a hike at the last meeting before deciding on a raise to ensure progress in dampening inflation did not stall, according to minutes published on Wednesday. The Bank of Canada has also been raising rates. "So not a lot of volatility coming out of this." "I would say this Fed meeting and press conference is probably going as on-script as we've seen in a long time," said Greg Taylor, a portfolio manager at Purpose Investments. The Fed raised interest rates by a quarter of a percentage point, setting the benchmark rate in the 5.25%-5.50% range, and the accompanying policy statement left the door open to another increase. ![]() The Toronto Stock Exchange's S&P/TSX composite index ended up 10.11 points, or 0.05%, to 20,561.64, within reach of its highest closing level in two and a half months posted on Monday. ![]()
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