Saturday, October 31, 2026

Canada’s Economy Slows Down in Q4 Thanks to High Interest Rates

The Bank of Canada’s rising interest rates are slowing down the economy’s momentum, as GDP stalled for the first time in the final three months of 2022 following five straight quarters of growth.

Latest data from Statistics Canada showed that the economy expanded only 0.3% in the fourth quarter of 2022, following a 0.2% drop in the previous quarter. The figure comes in light of forecasts calling for an increase of 1.6% annualized growth, suggesting the high interest rate environment is taking a toll on Canada’s economy.

Putting downward pressure on GDP growth was a decline in businesses’ inventories, following two quarters of record-high accumulation of inventories. Real business investment also slumped in the fourth quarter, falling 7.8% and marking the third consecutive quarterly decline. The dismal figures come in light of borrowing costs rising to 4.5%, after sitting at historically low levels less than one year ago.

On the other hand, though, household finances improved, largely due to federal government benefits aimed at lower-income Canadians, including a GST tax credit top-up and a 10% increase in Old Age Security payments. In the fourth quarter, household disposable income increased 3%, while the household savings rate rose from 5% in the third quarter to 6%.

Cambria Gold Mines — sponsored Sponsored · Cambria Gold Mines

Information for this story was found via Statistics Canada. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

Video Articles

The Red Cloud Fall Mining Showcase 2026 | Day 1

Can an Old Irish Mine Recover the Silver It Left Behind? | Julian Vickers – Northmin Corporation

Is Gold at $4,000 a Buy Zone or a Breakdown? | David Morgan

Recommended

Mercado Minerals Lengthens El Triunfo Vein by 190 Metres, Readies 1,500-Metre Zamora Drill Program

Blue Jay Gold Signs Ocean Partners Deal to Ship Steller Stockpiles Through 2027

Related News

Bank of Canada Cuts Interest Rates By 25 BPS To 2.5%

The Bank of Canada lowered its target for the overnight rate by 25 basis points...

Wednesday, September 17, 2025, 09:55:11 AM

Bank of Canada Further Cuts Policy Rate by 50 Basis Points to 3.75%

The Bank of Canada (BoC) has reduced its key interest rate by 50 basis points,...

Wednesday, October 23, 2024, 09:55:38 AM

Citi Bank: UK Inflation Will Hit 18.6% in 2023 and Rising Interest Rates Likely Won’t Help

The outlook for the UK’s economy is becoming increasingly more bleak. A recent study conducted...

Friday, August 26, 2022, 12:36:00 PM

25,000 Canadians Are Demanding Homeowner Relief Amid Rising Interest Rates

Canadians are definitely feeling the pinch of rising interest rates. In a petition on Change.org,...

Monday, October 17, 2022, 05:07:00 PM

Is Tiff Macklem Throwing in the Towel? BoC Governor Hints at Adjusting 2% Inflation Target

The Bank of Canada and its Governor, Tiff Macklem, have found themselves at a crucial...

Friday, September 8, 2023, 07:42:00 AM