David Rosenberg, the founder and president of Rosenberg Research, has a bleak outlook for Canada’s economy in 2023.
“In one word or less, recession,” he said in a phone interview Nov. 29.
“It is the bond market's way of crying uncle and telling the world that a recession is staring us in the face,” Rosenberg said. Large swings in the CPI commonly occur in materials and goods sectors, according to Rosenberg, which “will overwhelm what we’re going to be seeing on the services side...but the deflation will come through the goods market,” he said. As an economic slowdown occurs and deflation takes hold, Rosenberg said. He expects corporate earnings to decline in turn. In a typical recession, corporate earnings usually decline by around 20 per cent with a tight standard deviation, he said.
“Canada has never been this far exposed to rising interest rates and declining home prices as is currently the case.” Additionally, Rosenberg said Canada’s economic position could be made worse in 2023 by its reliance on the U.S.
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