FCC macroeconomic predictions for 2022 highlight rising rates

Farm Credit Canada (FCC) has released its macroeconomic snapshot for the first financial quarter of 2022. While FCC anticipates Canada’s economic growth will be weaker this quarter than the latter half of 2021 due to the Omicron variant and supply chain disruptions, this is expected to change in the second quarter, with growth continuing through the rest of the year.

The Bank of Canada increased its overnight rate to 0.50 per cent on March 2; FCC expects this rate to continue climbing throughout 2022 and to reach 1.5 per cent by year end. According to FCC, the magnitude of these rate increases will be largely influenced by the rate of business investment, how fast consumers deplete savings accumulated during the pandemic and the degree in which the Russia/Ukraine conflict impacts the Canadian economy.