Rapidly rising interest rates and other economic headwinds mean it’s becoming increasingly likely Canada will enter into a recession.
That’s the prediction from RBC senior economist Joshua Nye, who noted, “With a soft landing becoming more challenging, our base case assumes mild recessions in most of the economies we track.”
Nye noted that the Canadian economy had sustained good momentum up until May GDP posted a 0.2% decline. Thanks to that previous momentum, Nye predicts a “solid” 4.5% increase in second-quarter GDP, along with “decent growth” over the summer thanks to recovering travel and tourism demand, alongside commodity sectors getting a boost from higher global prices.
“But we think that momentum will be difficult to sustain as 2022 comes to a close,” he wrote, pointing to a softening in housing demand and declining…
