MNI BRIEF: Canada To Avoid Recession Next Year, BDC Says
Canada will avoid a recession again next year and give the central bank scope to hold interest rates longer than some investors predict, the federal government's small business lender said in a report Thursday.
"While 2024 will probably prove less tumultuous than 2023, growth will continue to slow against a backdrop of high interest rates," Montreal-based Business Development Bank of Canada said in its monthly outlook. "Canada's economy should avoid recession again next year, but growth will still be elusive."
The Bank of Canada will cut the 5% policy rate "as early as June," and take until 2025 to approach the 2.5% neutral rate, BDC's report said. Some investors are calling for a cut in April. Inflation will stabilize around the Bank's 2% target around the end of next year, BDC said. (MNI INTERVIEW: BOC To Delay Rate Cuts And Move Slow- Alexander)