Canada headed for inevitable recession in 2023 : Economist

According to a economist, Canada is heading towards a severe recession in 2023.

David Doyle has said in the CTV news article that he thinks we are not in a recession currently, but we might be approaching one. David Doyle is the head of economics at Macquarie Group according to the  article.  They think we will be in a recession in the first quarter of 2023.  

Macquarie Group,  a global financial services provider of Australia predicts that the GDP will contract approximately 3% and a 5% rise in unemployment rate during the foreseeable recession.      

Doyle believes the recession will be severe because the inflation has risen quite a bit, and unemployment level has fallen so low. At this point a recession seems inevitable.

He says that the economy is stalling after the reopening this year.  The slowing down of economy is to be expected, even after we had a some what a smooth transition.  

The cooling of the housing market will play a significant role in slowing down the economy Doyle has said.  Stats Canada portrays that output from real estate agents and brokers dropped 3.4% in July, and has fallen for the fifth consecutive month. Because of that they expect the trend to continue.

It is common for housing to weaken as you go into recession, Doyle said.  We are seeing enough signals to recognize that.  

To fight inflation, the Bank of Canada raised interest rates to 3.25 per cent on Sept. 7. That has also played a part in cooling down the housing market.  

According to the article Economists believe that the next interest rate hike will come on Oct. 26. Doyle has said he thinks it could be the last.

It will take around six, nine, 12 months before the Banks start to decrease the rate again, because they want to be certain that inflation is under control; Doyle said.