The next rate announcemnt will be on September 4, 2024. What are the effects of the most recent rate decreases?

Canadian economy is preparing for additional market volatility, even with the recent interest rate cuts made by the Bank of Canada.

While the central bank is in the midst of reducing rates, the economic downturn is expected to deepen before a recovery begins.

Most economists predict a tough period ahead, with economic growth likely to weaken across many provinces before a stronger rebound takes shape around 2025. The Bank of Canada has already reduced rates by 50 basis points and is expected to make further cuts in the coming months, potentially bringing the benchmark rate down to 3.5% by January 2025. However, these rate changes are expected to take 18 to 24 months to fully impact the economy.

Desjardins forecasts that Canada’s real GDP growth will hit a low point of around 1% by the end of 2024. A report from the Financial Post indicates that provinces sensitive to interest rates, like British Columbia, may see even weaker growth, with real GDP projected to reach only 0.6% and 0.9%, respectively.

As the economy navigates these turbulent times, the effects of the Bank of Canada’s rate cuts will become more evident, with a more significant recovery anticipated over the next several years.