Freeland warns of slowing economy in coming months


Finance Minister Chrystia Freeland warned Monday that Canadians can anticipate an financial slowdown in the coming months.

Speaking to enterprise leaders at an area firm in Gatineau, Que., Freeland stated that even with inflation starting to ease off, the street forward will probably be tough.

“It is vital, as deputy prime minister and minister of finance, that I inform individuals the reality about what awaits us,” she stated in French.

“Our economy will decelerate because the central financial institution has to deal with inflation.”

WATCH | Freeland says she will not ‘sugar-coat’ financial difficulties going through Canadians: 

Freeland says she will not ‘sugar-coat’ the financial difficulties going through Canadians

While she warns of a recession forward, Finance Minister Chrystia Freeland says the federal authorities has the correct instruments in place to get by this era efficiently.

While Freeland did not use the phrase recession, most shoppers and companies suppose Canada will enter one, in line with new surveys from the Bank of Canada.

The third-quarter enterprise outlook and client expectations surveys, launched Monday, present greater than half of shoppers surveyed consider there may be not less than a 50 per cent probability of a recession. And nearly half of shoppers report they’re shopping for much less and shopping for extra gadgets on sale in an effort to deal with the fee of dwelling.

Speaking to reporters after her speech on Monday, Freeland stated the coming months will probably be a “difficult financial time.”

“I’m not going to sugar-coat it, and I’m not going to assert that we do not have some challenges forward,” she stated, including that rising rates of interest will have an effect because the Bank of Canada tries to rein in inflation.

The annual inflation price was seven per cent in August, the newest accessible quantity. Statistics Canada will launch its newest inflation numbers on Wednesday.

Freeland advised all nations will probably be hit with the identical financial downturn.

The International Monetary Fund (IMF) downgraded its 2023 outlook for the world economy final week, warning that subsequent yr “will really feel like a recession” for a lot of due to central financial institution reactions all over the world.

The IMF, the lending company for 190 nations, stated on Oct. 11 that international financial progress could be a meagre 2.7 per cent in 2023, down from the two.9 per cent it had estimated in July. The world economy grew by six per cent in 2021.

The IMF stated the slowdown is being pushed by Russia’s struggle in Ukraine, power inflation pressures, punishing rates of interest and the lingering penalties of the worldwide pandemic.

“The worst is but to return,” stated IMF chief economist Pierre-Olivier Gourinchas.

The 2023 progress estimate for Canada has dropped to 1.5 per cent, down three-tenths of a share level from the final estimate made in July. Canada’s progress estimate for 2022, in the meantime, fell to three.3 per cent from July’s 3.4 per cent estimate.


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