Thunder Bay – The Canadian economy while strong at the end of 2022 is slowing rather fast into 2023. The Canadian economy showed remarkable resilience in the waning months of 2022, with the Bank of Canada’s surprise interest rate hike barely slowing activity.
Despite the increase, Statistics Canada’s latest figures showed the economy grew by 0.1 per cent in November and remained on track for a 1.6 per cent annualized growth in the fourth quarter.
Encouragingly, businesses continued to hire new workers and the unemployment rate remained near a historic low. The robust job market has so far been able to absorb the inflationary pressures that prompted the Bank of Canada to raise interest rates.
However, the labor market’s strength could be tested in the coming months. With the global economy in flux, the Canadian economy could face a significant downturn in the coming year and enter a recession, according to some analysts. Canada has had nine recessions since 1961, with the most recent one in 2009.
The Bank of Canada and other analysts will be watching the economic data closely in the coming months to determine how the economy will fare in the face of the current headwinds.