IMF says shocks could easily push Canada\u0027s economy into a mild recession. Find out more
“A mild recession could easily emerge, and the historical distribution of risks suggests a roughly 10-per-cent chance that the economy would contract for 2023 as a whole,” said IMF’s Canadian mission’s annual statement.sooner than they had expected.Article content
The Royal Bank of Canada had originally predicted the contraction would come in the second quarter, but it now expects a recession early in 2023, as higher interest rates and inflation sap growth.Recommended from EditorialIMF staff expect the Bank of Canada will take its rate to at least four per cent by the end of this year and leave it there for several quarters, resulting in inflation falling back to the two-per-cent target by the end of 2024.
It also urged Canadian governments to support this fight against inflation, by saving revenue windfalls from the commodity boom and avoiding widespread spending increases that would undercut the central bank’s efforts.
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