Inflation, interest rates to constrict growth

Canadian cities will see slow growth throughout 2023 as higher borrowing costs and inflation continue impacting local economies, says the Conference Board of Canada. It says high interest rates are starting to cool local housing demand and the national economy’s slowing will trim Calgary, AB’s forecasted GDP growth in 2023 to 2.4%. In Saskatoon, SK, global demand is increasing for many resources, so its economy is set to benefit from this spillover. GDP is forecast to advance by 1.2% in 2023. Ottawa-Gatineau, ON’s population gains look favourable, which will keep the region’s residential construction in good shape in 2023 and GDP forecast at 0.8% before expanding a further 2% in 2024. At the same time, Montreal, QC’s GDP growth is expected to slow significantly in 2023 to just 0.7%, due to a combination of high interest rates, low consumer confidence, and low immigration compared to other regions in Canada. In Toronto ON, a host of international and domestic challenges will slow its GDP growth in 2023 to just 0.6%, but most of these issues are expected to subside in 2024 and help GDP climb by 2.9%. Reduced purchasing power for consumers and higher borrowing costs for businesses will both have a major hand in dampening GDP in Vancouver, which is expected to see growth of just 0.5% in 2023 and 2.8% in 2024.