BDC is forecasting 1.2 per cent growth in Canada in 2024. We are not talking about recession here.”Ĭleroux said the BDC does not forecast provincial growth rates outside the current year because it does not have the same amount of data it has for the country. That is why the economy is not going to slow down as much. “The effects of interest rate hikes are not the same in Manitoba. “The burden of increased interest rates is lower here than in Canada,” Cleroux said. And housing starts have held their own in the province as well. Retail sales remain well above pre-pandemic levels in this province, whereas consumption is coming down nationally and although real estate prices have come down by about 6.5 per cent from the peak in Manitoba, that’s nothing compared to the 19 per cent decline nationally. Not only does this province continue to post unemployment numbers that are better than the national average - 4.3 per cent in Manitoba compared to 5.0 per cent in Canada in December 2022 - but Manitobans are paying about 25 per cent less than the national average in average scheduled monthly payments for new mortgage loans. In fact, the data for Manitoba is quite strong. Manitoba’s economy fares better when there is a downturn in the larger national marketplace, Cleroux points out, because of its diversified economy. Not surprisingly, Cleroux expects the Manitoba economy to outperform Canada this year - 0.9 per cent growth forecasted for Manitoba and 0.5 per cent for the country. That is why we are more optimistic about this slowdown that the last two recessions.” “If the economy is slowing down too much the Bank of Canada can reduce interest rates. “This is a much more controlled situation,” he said. This time the economy is performing well but creating too much inflation and the Bank of Canada has increased interest rates to reduce inflation financial crisis that caused a global recession and the pandemic in 2020. ![]() ![]() Cleroux noted that if a business suffered a 10 per cent drop in sales, that would be a very big deal, but a 1.0 per cent drop would not be nearly so concerning.Ĭleroux’s expectation that there will not be a big recession is borne out of some fundamental elements that are different than past recessions, most notably that the last two, in 20, were caused by outside forces - the U.S. The difference between 0.5 per cent growth and 1.0 per cent decline is not very significant. While Cleroux’s forecast calls for GDP growth in Canada this year of 0.5 per cent, there are still some forecasters calling for a mild recession and a 1.0 per cent decline in 2023. Now Cleroux also pointed out there is some quibbling about the use of the word that carries very negative connotations. It also means, according to Cleroux - and a consensus of bank economists agree - that Manitoba and Canada will likely not fall into recession this year. Pierre Cleroux, chief economist of Business Development Bank of Canada (BDC), expects the Manitoba economy to outperform Canada this year - 0.9 per cent growth forecasted for Manitoba and 0.5 per cent for the country. “The rate increases have done their job,” said Cleroux, meaning inflation is starting to come down. WINNIPEG - When the Bank of Canada increased interest rates by 0.25 per cent two weeks ago, it was the eighth increase in 10 months.īut Pierre Cleroux, chief economist at the Business Development Bank of Canada (BDC), told Manitoba Chambers of Commerce members Tuesday morning that the good news is it is likely the last one and by the end of the year, interest rates should start to come down.
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