Lower rates to drive stronger GDP growth next year

Below potential GDP growth and falling core inflation will persuade the Bank of Canada to cut interest rates further, with the policy rate settling at 2.5% next year. Lower interest rates should, in turn, drive a recovery in GDP growth from just 1.0% this year to 2.2% in 2025 and 2.8% in 2026, although elections at home and abroad are risks to the outlook.

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