Canada is not in for a recession this year sa国际传媒渂ut a soft landing.sa国际传媒�

Thatsa国际传媒檚 the word from Pierre Cl茅roux, chief economist of the Business Development Bank of Canada, who served up his economic forecast at a Surrey Board of Trade luncheon at Northview Golf Course on Feb. 1.

sa国际传媒淕rowth is going to be below one per cent, so theresa国际传媒檚 not much growth especially if you look compared to 2021-22 this is quite modest growth but the economy will continue to grow anyway, especially the second part of 2024,sa国际传媒� Cl茅roux said. sa国际传媒淪o the economy is going to be flat until interest rates start to decline but in the second part of the year you will see more momentum in the economy and in 2025 we will go back to a more balanced economy. Low inflation, lower interest rate and growth is going to become again, around two per cent.sa国际传媒�

Inflation is going down everywhere, he said, but there are still challenges. European countries will still under-perform this year, mostly because of the war in Ukraine, which is increasing the price of energy. sa国际传媒淚tsa国际传媒檚 really disrupting supply chains, so Europe is going to have another difficult year in 2024.sa国际传媒�

North America, in contrast, sa国际传媒渋s going to be the best region in the world. This is where we see the most growth in the world right now, itsa国际传媒檚 in North America.sa国际传媒�

The U.S. economy is doing better than Canadasa国际传媒檚, he noted. sa国际传媒淲hat is different is the growth in the U.S. is much stronger than in Canada.sa国际传媒� The reason, Cl茅roux said, is the structure of mortgages sa国际传媒渋s quite different in the U.S.sa国际传媒� Eighty per cent of Americans have 25-year mortgages. sa国际传媒淚n Canada itsa国际传媒檚 the opposite sa国际传媒� 80 per cent of Canadians have a mortgage for less than five years. So when you increase the interest rate, you donsa国际传媒檛 have the same impact on people. If people have a mortgage for 25 years, well they wonsa国际传媒檛 see the difference at the end of the month even if interest rates are increasing. They might have a car loan and something else, but in Canada the hit is more because people renew their mortgage.sa国际传媒�

Two more reasons the U.S. is performing sa国际传媒渕uch bettersa国际传媒� than Canada, he said, is because the U.S. government is spending a lot of money, sa国际传媒渨hich is helping the economy,sa国际传媒� and consumers south of the border have also been spending a lot of money. sa国际传媒淐onsumption in the U.S. is very strong.sa国际传媒�

Cl茅roux expects the Bank of Canada will reduce interest rates in June, after increasing it for the past 18 months. And when interest rates decline, he said, consumption will increase sa国际传媒渂ecause theresa国际传媒檚 money in the system.sa国际传媒�

sa国际传媒淥ur forecast for the B.C. economy is growth around 0.5 per cent,sa国际传媒� he said. sa国际传媒淪o itsa国际传媒檚 modest growth, but not a recession. The economy is just slowing down. Like for Canada when interest rates start to decline in June, you will see more pick up in the economy. The first sector that is going to come back is the housing market. Retail is also going to improve and the manufacturing sector is going to follow; 2025 is going to be a much better year where growth is going to be close to two per cent.sa国际传媒�