A recent study has suggested that Canada is on the verge of a mild recession due to high lending costs, a dip in the American economy, and ongoing inflation, all of which are adding to the country’s economic uncertainty.
The latest economic forecast by Deloitte Canada, released just before the federal budget on Tuesday, stated that stringent monetary practices would further constrain economic growth this year.
However, the research also concluded that the recession wouldn’t be as devastating as previously predicted because of the robustness of the labour market, which is maintaining a healthy income for the citizens.
The study forecasts that real Gross Domestic Product will decline by 0.5 percent this year before rebounding to record a growth of two percent in 2024; furthermore, inflation is predicted to drop significantly by the end of this year.
The report also assumed that the federal budget would introduce measures to make living affordable for Canadians of lower income, offer healthcare support for provinces, and promote incentives to curtail carbon emissions, all of which would not have a significant effect on inflation if the rise in spending is not too dramatic.