MOSCOW (Sputnik) – The majority of Canadian businesses expect a recession in 2023, according to a report released Monday by the Bank of Canada, which is based on the results of the Business Outlook Survey for the fourth quarter of 2022. .
“While most businesses expect Canada to experience a recession over the next 12 months, the majority believe it will be moderate,” the report said.
Some companies are cutting budgets or suspending development, the report says. Most companies cite interest rate increases as the main reason for the expected recession, along with inflation, which is reducing household spending capacity.
“Companies’ short-term inflation expectations are broadly unchanged – they remain above the Bank’s inflation target. As in the previous survey, respondents attribute inflationary pressures to high oil prices. energy, persistent supply chain issues, high labor costs, a strong economy,” the report said.
In 2023, businesses expect the level of inflation in Canada to reach 4.5% against the Central Bank’s target range of 2%. This level of inflation can only be reached within a five-year horizon, according to the report.