Canada’s economy 'set to turn a corner': TD Economics

Canada’s economy appears to be positioned for a rebound after experiencing weakness last year, but consumer spending is expected to be impacted by higher borrowing costs, tighter immigration policy and a softer labour market, according to a report.

On Tuesday, TD Economics said in a quarterly forecast that “the economy is soft, but not facing a cliff,” which will allow the Bank of Canada to be cautious while determining how restrictive interest rates need to be. The report highlights that after “no growth” during much of 2023, the economy has performed better in the first quarter of the year and is “set to turn a corner.” 

“Real GDP (gross domestic product) advanced by 1.7 per cent on an annualized basis boosted by a second straight quarter of healthy three per cent annualized consumer spending,” the report said.

“Going forward, we expect the overall Canadian economy to pick up the pace from 2023’s weakness. However, the consumer is not likely to be pulling the freight.”