January 17, 2023, 12:01 p.m.Deloitte Canada's latest Economic Outlook, released on Tuesday, says that the impact of rising interest rates and a slowing U.S. economy will drag down economic growth.
"It's fair to say that 2023 is shaping to be a rocky year for the Canadian economy," Deloitte Canada's National Economic Advisory Leader Trevin Stratton said in an interview with"While we were previously projecting a recession in the fall of last year, the conditions have worsened a bit and so we're projecting a slightly longer recession now."
"Households are being battered by the double whammy of high inflation and rising borrowing costs," the report said. Still, the report noted that one of the "wild cards" in the forecast is the Canadian labour market, which has remained tight despite concerns about an economic slowdown. Stratton said while recessions traditionally are associated with significant job losses, the current situation is different as businesses need to balance softening demand against a tight labour market.