An FCC analyst says expect to see uncertainty in the economy, however the country is not in a recession.
Speaking to ag producers at Agrivisions taking place at the Lloyd Ex, Farm Credit Canada senior economist Leigh Anderson says the volatility will persist even though there are some strengths like agriculture.
“The outlook looks good for grain, oilseed and livestock producers. It looks like they are going to be profitable this year.”
He says the U.S. drought is a source of concern especially with what it will mean for grain and oil seeds supply out of the States and as well its impact on the American cattle herd.
Despite the Bank of Canada having pushed up interest rates eight times in the last year as its governor says they are trying to reduce inflation, Anderson is qualifying the use of the recessionary label.
“We are not in a recession – yet. It will depend on where actual GDP growth comes in relative to the same quarter of the year before. So if it goes negative for two consecutive quarters – technically that’s a recession. But you won’t know until after the fact – whether we are actually in a recession.”
Anderson says the data may not come in until the third quarter. In the interim, people will continue to experience economic issues like high prices. In the event that the economy enters a recession, Anderson notes the Bank of Canada has tools it can use as well.
Bank of Canada governor Richard Tiffany Macklem said on Tuesday that they anticipate inflation easing to about 3 per cent by mid-year, and settling at 2.5 per cent by the fourth quarter. Macklem added they are still prepared to use the interest rate lever if inflation does not cool off.