Towards a cut in interest rates before the end of the year?

According to economist Philip Gosselin, we could see a drop in interest rates by the end of the year or early next year.

• Also Read: Rising interest rates: New construction will drop sharply

• Also Read: Buying a chalet in Quebec will cost less in 2023

• Also Read: Budget Girard: Quebec repays part of its debt

In an interview on the “Le Bilan” program, he explained that inflation will slowly but surely come down by the summer and thus avoid a recession.

If so, rates will stabilize in late 2023 or early 2024.

“I don’t give personal financial advice online,” he says. But if the current rate is not at the end of 2023, then certainly in 2024, there is a strong possibility that it will be revised downwards.

However, the next few months could be difficult for those who need to renegotiate their rates.

“Canadian households that have not yet had their rates renewed as of March 2022, they will probably go to the bank in the coming months and find that there is a good difference between the rates we had during the pandemic and what they are now. The norm in large financial institutions,” he continues.

The expert also commented on the Bank of Canada’s maintenance of the key rate at 4.5%, which he sees as favorable in terms of inflation.

“By the summer, we should be in the range of 1 to 3%, which will allow us to potentially anticipate the appearance of a “relaxation” of the key rate by the end of the year. 2023″, commented the expert.

Thus depression can be avoided.

“We are living in a real endemic situation where there are too few workers to keep up with demand and this means that even if the economy slows down, workers will continue to be employed, able to maintain a good living and therefore be able to fully participate in the economy.” Mr. Gosselin explained. This means that most serious economists expect a recession to be avoided.

“On the other hand, this is not a strong growth year, so we will probably only see a growth rate of 1% of GDP”, he warned, however.

Watch Frances Gosselin’s full explanation in the video above