The economy faces a prolonged period of weak growth as US tariffs and uncertainty over the future of the USMCA weigh on exports and investment. We forecast quarterly GDP growth of less than 1% annualised over the next three quarters. Canada’s retaliatory tariffs mean core inflation is likely to be above 3% for the rest of the year but, as it becomes clear that those tariffs are not having second-order effects, we expect the Bank to resume easing and take the policy rate down to 2.0%.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services