After several difficult months, the Canadian economy should manage to avoid recession in the final two quarters of 2023, estimates the Canadian Federation of Independent Business (CFIB).
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The Canadian economy is therefore expected to post weak growth of 0.3% in the third quarter before a slight recovery of 1.4% in the following quarter, according to its forecasts in collaboration with AppEco.
The inflation rate is also expected to rise slightly in the third quarter of 2023 before falling in the fourth quarter. However, it is expected to remain above the Bank of Canada’s target range of 1% to 3%.
“It is possible that the Bank of Canada will consider raising its key interest rate again,” Simon Gaudreault, chief economist and vice-president of research at CFIB, said on Friday.
“However, several indicators point to a significant slowdown and the impact of previous increases is not yet fully felt in the economy. Patience is therefore essential,” he added.
The vacancy rate is also expected to decline, falling to 4.2% in the third quarter, still representing 594,900 positions to be filled.
“The labor market should continue to weaken as employers face fewer vacancies and overall employment increases,” Mr. Gaudreault analyzed.
In general, many Canadian SMEs rely heavily on holiday shopping to pay off debts and make up for the year’s lost sales.