Published on 2/3/2023 at 5:19 p.m
The PBO expects the Bank of Canada to keep its interest rate target at 4.5% for the remainder of 2023 before starting to lower it in 2024. (Photo: The Canadian Press)
Ottawa – The House Budget Commissioner has downgraded its forecast for economic growth this year.
The latest economic and budgetary outlook from the Parliamentary Budget Officer (PBO), released on Thursday, projects growth of 1.0% this year, followed by 1.6% in 2024. This outlook compares with the October forecast of one Growth of 1.2% in 2024 and 2.3% in 2024.
He expects lower residential investment and weaker consumer spending in the first half of the year, while companies scale back inventory investments into 2023 as sales growth slows.
The PBO also expects the Bank of Canada to leave its interest rate target at 4.5% for the remainder of 2023 before starting to lower it in 2024.
The Federal Budget Watcher estimates that from January 2024 the central bank will begin to lower its key interest rate by a quarter of a percentage point on each of its eight fixed announcement dates next year.
The PBO’s outlook forecasts a federal budget deficit of $36.5 billion (B$) for Ottawa’s fiscal year 2022-23 and a deficit increase to $43.1 billion for 2023-24 due to slowing revenue growth and increased program spending.
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