We expect weak GDP growth of 0.8% this year, and a fall in inflation to less than 2% next year, to persuade the Bank of Canada to cut its policy rate back to 2.5% by mid-2025. A recovery in productivity and looser policy should drive a rebound in GDP growth to 2.3% in 2025 and 2.5% in 2026, although slower immigration and elections at home and abroad are risks to the outlook.
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