• There are few changes to the outlook relative to our last publication. Most of the changes reflect the fact that incoming data for industrialized countries has been somewhat more positive than expected in recent weeks, leading to minor upward revisions to 2022 forecasts. In some cases, growth dynamics imply that some of this strength has led to small increases to 2023 forecasts. The general narrative remains the same as earlier articulated, the global economy is expected to slow rapidly owing to the combined impacts of still-elevated commodity prices for commodity importers, the deterioration in purchasing power from higher inflation, the policy response to lower inflation, the challenges faced in China and of course remaining uncertainties from Russia’s war on Ukraine.
  • On the inflation front, recent data in Canada and the US suggest the expected slowing is underway, increasing confidence that central banks in those countries are near terminal rates. In Canada, the Bank of Canada is signalling a pause as it waits to assess the impact of its policy actions on inflation and growth. This is in line with our previous forecast, and we continue to expect that the BoC’s next move will be a cut late in 2023 given the expected slowing in both inflation and growth. A similar dynamic is forecast for the US, though we continue to expect that the Fed will lift rates to 5% early next year before eventually beginning rate cuts late in 2023. A series of additional cuts are expected in 2024.

For more details on our forecast narrative, please refer to our October forecast

Table 1: International: Real GDP, Consumer Prices 2020 to 2024
Table 2: North America: Real GDP 2020 to 2024 and Quarterly Forecasts
Table 3: Central Bank Rates, Currencies, Interest Rates 2021 to 2024
Table 4: The Provinces 2020 to 2024