Canada Outlook: Soft landing still most likely but recession risks are rising

Economic growth in Canada is forecast to slow sharply in the latter portion of 2022 and in 2023 – likely to stall speed – as momentum from the reopening of the economy after Omicron fades and compounding threats weigh on growth. We’re increasingly concerned that a conjunction of headwinds, led by an overly aggressive Bank of Canada tightening and a highly-indebted household sector, could push the economy into recession. While we still view a soft landing as the most likely outcome for Canada, we reckon the odds of a recession over the next twelve months have risen to about 40%.

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Tony Stillo

Director of Economics, Canada

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Director of Economics, Canada

Toronto

Michael Davenport

Economist

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Private: Michael Davenport

Economist

Toronto

Michael is an Economist on the US Macro team with a particular focus on the Canadian economy. He primarily supports the Director of Canada Economics in producing macroeconomic research and forecasts, monitoring the Canadian economy, and liaising with clients and the media. Michael first joined Oxford Economics as an Economic Research Analyst Intern in the Toronto office in early 2019 and has since been promoted to an Economist. Michael holds a Bachelor of Arts in Economics and Financial Management from Wilfrid Laurier University.