From the TD trading desk Canada’s economy should avoid a hard landing but it is facing some turbulence in the near term.
A number of recent economic indicators suggest growth faltered in the third quarter, even with continued population growth and three rate cuts to date from the Bank of Canada, putting it ahead of other Group of Seven central banks.
That weakening will likely prompt Canada’s central bank to scale back growth projections, and may prompt even deeper interest-rate cuts to buoy consumption and stoke the economy, according to analysts.
Economists surveyed by The Wall Street Journal peg growth for the latest quarter just above 1% annualized, down from 2.1% in the second quarter. The Bank of Canada, which had forecast growth of 2.8% for the third quarter, is expected to update its outlook next week when officials meet to discuss interest rates.