Canada's recession odds are now down to a 'coin flip' — via financialpost Canada Economy Inflation Recession
Canada’s risk of a recession is growing, but a hard landing isn’t a done deal, according to The Conference Board of Canada’s latest forecast.
Though the economy is slowing down, it is still likely to eke out growth over the next 12 months, avoiding a recession, the Conference Board said in anpublished this week. That being said, there is still a chance Canada could miss its soft landing. The Conference Board pegs the country as having a 50-50 chance of recession, “down to a coin flip.”
“Although it’s challenging to assess the different risks facing Canada and the global economy, our modelling shows that the probability of Canada entering a recession in the coming year stands at 50 per cent,” Pedro Antunes, chief economist at The Conference Board of Canada, said in a news release.Article content
There’s much to be optimistic about, the Conference Board said in its analysis. For one thing, it’s betting strong consumer spending will help carry the economy through. The board says Canadians’ flush savings accounts, amassed during the pandemic thanks to government supports, are likely to keep getting spent on travel and services in the coming months. Adding to that is a tight labour market that’s sent wages higher, helping to keep consumers buying even as inflation rises.
Meanwhile, high commodity prices will light a fire under Canadian exports. Commodities such as oil, gas, wheat and fertilizer are all seeing price gains, good for exporters’ bottom lines. Higher profits are filtering down to governments as companies pay higher taxes and royalty fees. That sets the country up for success, The Conference Board said, and it’s likely to grow more than its peers.Article contentBut, there’s still a lot that could go wrong.
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