Our Canada Chart Pack has been updated with the latest data and our analysis of recent developments.
The strength of GDP growth in the first quarter is unlikely to be sustained, with growth set to drop back below potential for the rest of the year. Weaker demand growth and a downturn in shelter inflation will help bring headline inflation back to the 2% target by the end of 2024. We expect the Bank of Canada to cut interest rates from the current 5.00% to 3.75% by the end of 2024 and 2.50% in 2025. Looser policy should drive a recovery in GDP growth to 2.3% in 2025, from 1.0% this year.
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