BoC Holds Interest Rates at 1.75; Is a recession coming?
Bank of Canada holds interest rates steady at 1.75% for the ninth-consecutive policy announcement.
What does this mean Canada’s Economy? Is a recession still coming?
Over the last year we’ve been bombarded with information about a looming recession and the "inverted yield-curve prophecy."
Then, in November sentiments changed when the yield curve returned to regularity. Sparking news articles stating “We avoided the recession!”
So, what are we to believe?
Canada’s economy is in an interesting position. Quebec and Ontario are thriving which is propping up our GDP, while many sectors in our western provinces are struggling.
BC has yet to feel the full effects of a severely contracted forestry sector. Alberta and Saskatchewan’s Oil & Gas supply chain has reached a bottleneck, causing energy producers to allocate their investments south of the border.
Thankfully, there is some good news - we live in Vancouver. A couple key features of our western major city are:
1. Vancouver’s economy is diversified
2. Desirable place to live
Vancouver has a robust economy fueled by real estate, finance, construction, international trade, tech, the public sector, and tourism. No other city west of Toronto offers such a diverse mixture of industries. If we are heading into a recession, this variety will help cushion the affects.
Which brings me to my next point, Vancouver is a desirable place to live.
In 2018 Canada approved an estimated 313,000 temporary residents, Ontario received the bulk of the newcomers with an estimated 42% and BC received the second largest amount of migrants with an estimated 21%.
Of the 21% migrants, the majority reside in Vancouver due to our large universities, employment opportunities and (of course) our temperate climate.
In conclusion, Canada's economic growth is easing, but we still continue grow. If our economy were to stagnate and enter a recessionary period the Bank of Canada is well positioned to adjust interest rates respectively.
Thanks for reading,
Adam Sale B.Mgt – Mortgage Broker
Cell: 778-215-4121 | www.AdamSale.ca