With economic momentum fading, the labour market softening, and inflation falling below the 2% target in September, we now think the Bank of Canada (BoC) will front-load policy normalization with 50bp rate cuts in October and December. Despite subdued near-term growth prospects, GDP will likely rise by 1% in 2024, up 0.1ppt from last month, before quicker rate cuts underpin a faster 1.4% advance in 2025, up 0.2ppts from our previous forecast.
Canada: Faster rate cuts are likely as growth slows amid disinflation