Quebec’s Economic Outlook Looks Rosy as the DLI Continues to Rise August 29, 2024

Households and businesses are finding reassurance in a number of factors. First are the interest rate cuts announced in June and July, which shaved a total of 50 basis points off Canada's key rate. These reductions should be just the beginning, as the rate-cutting cycle is expected to continue. According to our most recent forecastsExternal link. , the Bank of Canada policy rate, which currently sits at 4.50%, should reach 3.75% by the end of 2024 and 2.25% by the end of 2025.

The second bit of encouraging news is that Quebec's inflation rateExternal link. has made convincing progress toward the 2% target. With Canadian inflation also returning to the middle of the 1% to 3% range, consumers are feeling relieved. And yet consumer prices in general remain high following the steep increases from the past few years.

Another issue is that interest rates are still high despite this summer's cuts. While business and consumer confidence are on the rise, the financial impact of the pandemic is still being felt.