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Recession is approaching in Canada due to rapid rate hikes : CCPA

According the CCPA, the central bank is trying to tackle inflation by raising the interest rates, which can significantly cause a collateral damage to the country.

A recent study from the Canadian Centre for Policy Alternatives has revealed that the rapid increase in the interest rates by the Bank of Canada is likely to trigger a recession in the country.

According the CCPA, the central bank is trying to tackle inflation by raising the interest rates, which can significantly cause a collateral damage to the country. It also mentions that this could lead to the loss of over 85,000 job positions.

It notes a pattern over the years, of how every time the inflation rate fell below 5.7% and was tackled by high interest rates, it led to a period of recession. To mention, this has happened thrice over the past 60 years.

Its time for a new policy, the CCPA says.

It further recommends the Bank of Canada to adjust the target inflation rate to 4% to avoid the risk of sending the economy into a recession.

A day before, bank of Canada released two quarterly surveys which revealed how consumers and businessman are expecting inflation to stay high for years to come.

 

Prabhnoor Kaur

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