#canada #productivity #growth #interestrates This question pertains to the intersection of interest rates and productivity, specifically within the Canadian context. Interest rates can indeed have a direct impact on productivity. Beata Caranci, Senior Vice President & Chief Economist at TD, addressed this issue in her economic update last week, highlighting key factors contributing to the recent decline in productivity in Canada.
Canadians don't like the word productivity
Living standards were lower in 2023 than in 2014, based on GDP per capita
Falling real median wages coincides with falling productivity
Since 2019 all major sectors have been lagging in terms of productivity So when will lower interest rates come into play?
"a persistently wider interest rate gap to the U.S. would likely add downside weight to the currency. So this is still hypothetical, but certainly within the realm of possibilities and we will have to start considering this more meaningfully if a convincing productivity rebound doesn’t form in next year."
Visit the TD page for the full article and projection table: https://economics.td.com/ca-bc-client-presentation?utm_source=TD&utm_medium=Email&utm_campaign=ca-bc-client-presentation
We will post more on this topic in the months to come.
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