In our summer Global Economic Outlook (GEO), EDC Economics anticipates the global economy will grow modestly by 3.1% in 2024, as major central banks begin lowering their policy rates. Growth is expected to accelerate to 3.5% in 2025, driven by the delayed effects of interest rate cuts and a more stable pricing environment boosting demand conditions.
A weak economic outlook for Canada is a major factor that prompted the Bank of Canada to lead the G7 central banks in cutting rates during its June meeting. We project the Canadian economy to grow by 1.1% in 2024, with an improvement to 1.9% in 2025.
Despite the initial decrease in interest rates, further reductions are necessary to alleviate the burden on heavily indebted Canadian consumers. Total household debt payments increased by nearly 8% in the first quarter of 2024 compared to the previous year. This high debt service ratio, one of the highest in the Organization for Economic Co-operation and Development (OECD), has led Canadians to prioritize saving over spending.
Learn more here: https://www.edc.ca/en/trade-matters/modest-global-economic-outlook.html
