Bank of Canada's Tiff Macklem says current economic forecast is for a 'soft landing' - The Globe and Mail

Bank of Canada Governor Tiff Macklem said on Tuesday that the current forecast is for positive but weak growth for the rest of the year, and therefore not a recession, and that by most people’s measures would be a “soft landing.”

The bank raised interest rates eight consecutive times through January, bringing the overnight benchmark to 4.50 per cent, as it battled inflation. It has since kept rates steady at two meetings, in part because Macklem has said the goal is to slow growth, but avoid a recession.

Avoiding a recession while bringing inflation back to its 2 per cent target, from 4.6 per cent in March, would likely be seen by economists as a “soft landing”. The bank said last week the risk of a recession this year had diminished.

For the last three quarters of this year, “we expect growth to be small positive, so less than 1 per cent but above zero,” Macklem told a parliamentary committee. “But it is going to be slightly positive growth, which I think most people would call a soft landing.”

Macklem went on to say that the top risk to Canada’s growth scenario is a global recession. Macklem also said he expects prices to come down further, but reiterated the bank stands ready to raise rates again if necessary.

“We are prepared to raise the policy rate further” to get inflation all the way to 2 per cent, Macklem said.

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Bank of Canada's Tiff Macklem says current economic forecast is for a 'soft landing' - The Globe and Mail
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