July 25, 2024
✅️Inflation
Inflation is getting closer to 2% target thanks to tight monetary policy. However risks remain particularly because of services prices. Wage growth remain elevated which is a major contributor to services inflation. Property market inflation remains high due to rising rent and mortgage interest costs. CPI is expected to fall below Core CPI because of declining oil prices in Q3 2024. CPI is projected to return sustainably to the target of 2% in the end of 2025.
✅️Global Economy
The global economy is expected to grow at around 3% over the projection horizon. In the United States, economic growth has slowed after a period of surprising strength. Past increases in interest rates are weighing on consumption, and government spending has moderated. The euro area economy, meanwhile, is expanding after stalling in 2023. Inflation remains above central bank targets in the United States and the euro area, though it is expected to gradually ease.
✅️Canada’s Economy
Economic growth in Canada has picked up but remains weak relative to population growth. Consumer spending per person has been declining, and residential investment has been subdued. Strong population growth has added to the supply of workers, and the labor market has cooled
significantly.
Canada’s economy is expected to strengthen in the second half of 2024. In the near term, growth in exports and household spending is anticipated to pick up. Household spending should strengthen further in 2025 as borrowing costs ease. Population growth is projected to slow because of new limits on
arrivals of temporary residents. Excess supply will slowly be absorbed