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BoC Forecasts: Solid Upward Revisions To CPI, More Humped Profile For Growth

CANADA
  • Solid upward revisions to CPI in 2023 and 2024, just in 2023 for GDP with partly offsetting downward revisions in 2024 (with the difference between the Q4/Q4 and calendar year figures making it clearer that the newfound strength is coming in the near-term).
  • Of note, 2023 inflation is seen ending the year at 2.9% (from 2.5% in April) to average 3.7% (from 3.5%) and is still at 2.2% in 4Q24 (from 2.1%).
  • Historical GDP growth was revised up strongly (3.1 from 2.3 in Q1, 1.5 from 1.0 in Q2) and is still holding at this 1.5% rate in fresh Q3 forecasts. That continues with GDP growth seen averaging 1.8% in 2023 (from 1.4%) but it then slows again to 1.2% (from 1.3) as that excess supply the BoC is banking on comes about.

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