17.13°C Vancouver

Jan 31, 2024 4:13 PM - The Canadian Press

Economic bounce back at the end of 2023 could push back rate cuts, economists say

Share On
canadas-economy-started-to-get-back-on-track
Statistics Canada reported Wednesday the economy grew 0.2 per cent in November, marking the first expansion in six months.(Photo: The Canadian Press)

Canada's economy appears to have ended 2023 on a stronger note than expected, which economists say could push back the timeline for interest rate cuts this year.

Statistics Canada reported Wednesday the economy grew 0.2 per cent in November, marking the first expansion in six months.

A preliminary estimate suggests real gross domestic product increased 1.2 per cent on an annualized basis in the fourth quarter, following a decline of a similar magnitude in the third quarter.

That would bring economic growth in 2023 to 1.5 per cent, StatCan said.

Those figures exceed the Bank of Canada's forecasts. The central bank projected 0.7 per cent growth in the fourth quarter and one per cent growth for 2023.

The Canadian economy has slowed over the past year as higher borrowing costs weigh on consumer spending and business investment. But it has so far avoided a recession.

Bank of Montreal chief economist Douglas Porter says the stronger-than-expected report on Wednesday suggests 2024 economic forecasts may need to be revised higher.

That also means the Bank of Canada can take its time before cutting interest rates.

"This solid result, after a long dry spell for growth, affords policymakers the ability to gently push back on easing chatter, as they wait for underlying inflation to come down further," Porter wrote in a client note.

While Statistics Canada offers a glimpse of what it expects in its preliminary estimates, final results can often greatly differ.

The federal agency said growth in November was driven by gains in goods-producing industries, including manufacturing and wholesale trade.

Meanwhile, education services sector shrank in the month as strikes in Quebec began.

The Bank of Canada as well as private sector economists expect economic growth to remain muted in the first half of 2024 before rebounding in the second half of the year.

The central bank is widely expected to start cutting interest rates as early as this spring.

At the last interest rate decision, governor Tiff Macklem indicated that conversations at the governing council have shifted toward the timing of rate cuts.

The central bank’s key interest rate currently sits at five per cent, the highest it’s been since 2001.

Latest news

canadas-dabrowski-and-partner-routliffe-win-u-s-open-womens-doubles-title
EnglishSep 05, 2025

Canada's Dabrowski and partner Routliffe win U.S. Open women's doubles title

Canadian tennis player Gabriela Dabrowski has won the US Open Grand Slam title with her New Zealand partner Erin Rutliff. The Canadian player won the women's doubles title in straight sets with her partner. Together, the two defeated the pair of Taylor Townsend and Katerina Siniakova 6-4, 6-4. Earlier, Gabriela Dabrowski also won the US Open title in 2023. Pawan Sahni, of Newton Tennis Club in Surrey, says “the win is a boost for Canadian tennis.” He added, on one hand, just a few weeks ago, young player Victoria Mboko won the Canadian Open title, and now, with Canada's senior player win
BCSep 05, 2025

Coquihalla Highway reopened following wildfire closure

The Coquihalla Highway (Highway 5) between Hope and Merritt has reopened in both directions following a closure caused by the Mine Creek wildfire. Due to the proximity of the fire, drivers should be prepared for the Coquihalla Highway to be closed with minimal notice. Drivers are advised to not stop in the fire zone. Intermittent lane closures can be expected as crews continue to assess and repair roadside damage, and visibility is reduced due to wildfire smoke. Drivers should also be prepared for an increased risk of wildlife presence due to fire damage to wildlife-exclusion fencing on this s
police-investigate-early-morning-shots-fired-in-south-surrey
CanadaSep 05, 2025

Police Investigate Early Morning Shots Fired in South Surrey

Surrey Police Service (SPS) is investigating an early morning shooting that occurred in South Surrey. On September 5, 2025, at approximately 3:50 am, SPS responded to reports of shots fired in the 14300 block of 28 Avenue, Surrey. Upon arrival, members located numerous shell casings on 28 Avenue. It does not appear that any residences were damaged and nobody was injured. SPS Frontline Investigation Support (FLIS) Team are attending and have taken conduct of the investigation. Investigators believe this incident is related to an ongoing extortion investigation.
ministers-statement-on-the-cowichan-valley-transit-labour-dispute
BCSep 05, 2025

Special mediator appointed to resolve Cowichan Valley transit labour dispute

Jennifer Whiteside, Minister of Labour, has issued the following statement on the Cowichan Valley transit labour dispute: “This strike has been deeply disruptive to people living in the Cowichan Valley, who rely on transit to get to work, go to school, attend medical appointments and access everyday services. “This dispute has gone on for far too long. There’s a real urgency for the parties to get back to the table, find a fair resolution and get transit services back on the road. “To help the parties resolve the ongoing labour dispute, I have appointed Vince Ready as a special mediato
elon-musks-neuralink-brain-chip-implanted-into-two-quadriplegic-canadian-patients
CanadaSep 05, 2025

Elon Musk's Neuralink brain chip implanted into two quadriplegic Canadian patients

Two Canadian patients with spinal cord injuries have received Neuralink brain implants that have allowed them to control a computer with their thoughts. They are part of the first clinical trial outside of the United States to test the safety and effectiveness of Elon Musk's Neuralink wireless brain chip, which he introduced to the public in 2020, and was first implanted in a paralyzed American in 2024. The Canadian men, both around 30 years old – one from Ontario, the other from Alberta – have limited or no ability to use their hands. Dr. Andres Lozano, a neurosurgeon at University Health

Related News