Economists cut Canada’s growth forecasts
EU's Economy Commissioner Paolo Gentiloni, Eurogroup President Paschal Donohoe, World Bank President David Malpass, Italy's Finance Minister Daniele Franco, French Finance Minister Bruno Le Maire, Canada's Finance Minister Chrystia Freeland, Britain's Chancellor of the Exchequer Chancellor Rishi Sunak, Managing Director of the IMF Kristalina Georgieva, Germany's Finance Minister Olaf Scholz, US Treasury Secretary Janet Yellen, Secretary-General of the Organisation for Economic Co-operation and Development (OECD) Mathias Cormann, Japan's Finance Minister Taro Aso pose for a family photo during the G-7 finance ministers meeting at Lancaster House in London, Britain, June 5, 2021. PHOTO: REUTERS
Floods that wiped out bridges, roads and rail lines in British Columbia will hurt Canada’s economic growth and fuel inflation in the fourth quarter, but the Bank of Canada’s rate hike timing is likely to remain unchanged, economists said.
“We are trying to wrap our arms around this complex situation, and waiting to see just how long-lasting some of the blockages are,” said Doug Porter, Chief Economist at BMO Capital Market Economics. Porter halved his fourth quarter growth estimate to 3% from a year earlier. That drags down his full-year growth forecast to 4.8%, from a previous forecast of 5%, because of the floods and global supply chain disruptions.
“For the bank, it is not obvious that the weaker growth figures will have much impact as they have hit the supply side and actually threaten to boost inflation even further,” he added. Economists are clear the flooding will have a material impact on near-term GDP forecasts, but there is uncertainty about how fast growth could bounce back. REUTERS
Published in The Express Tribune, November 25th, 2021.
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