Big bank economists say despite its astonishing resilience, the economy is likely headed for a mild slowdown in the year ahead, while stressing that recent events show just how difficult it is to predict the future. ‘coming.
Speaking at a roundtable hosted by the Economic Club of Canada, Scotiabank Chief Economist Jean-Francois Perrault said the economy could be heading for a “soft landing”, an almost mythical phenomenon that decision-makers have been aiming for for a long time, but which they have never really succeeded.
TD Bank’s chief economist, Beata Caranci, for her part pointed out that while the bank was forecasting about 100,000 job losses this year, that was still well below the 300,000 losses that would normally occur during a recession.
Ms. Caranci said emerging factors, such as the reopening of the Chinese economy, could, however, push inflation higher and force rates to stay higher for longer, compounding the blow to the economy.
Royal Bank Chief Economist Craig Wright said the bank is sticking to its forecast of a recession, as it has predicted since July, amid a number of long-term tailwinds, including free trade, cheap credit and cheap labor, are being reversed.
Wright, however, expects the slowdown, deliberately imposed by interest rates, to do its job and bring inflation back into the Bank of Canada’s target range by the end of the year.