​Economist expects 'pretty severe' recession in Canada in 2023

Canada's economy showed a slight improvement in July, but it wasn't enough for a prominent Bay Street economist to hold back on his expectation of a recession.

Thursday's economic data showed output from real estate agents and brokers sank 3.4 per cent.   "We actually think it (a recession) will be pretty severe in Canada," he stated.    Despite the expected economic contraction, Doyle does not believe the Bank of Canada (BoC) will deter from rising interest rates.    He explained that the bank is committed to taming inflation, and backing down now might result in a more significant problem later. Sticking to hiking rates now, rather than later, is the "lesser of two evils," he said.    Most Bay Street economists anticipate an interest rate rise at the BoC's next interest rate decision on October 26.    "It will likely be six, nine,12 months before we start to see the bank cutting rates again, and that's because they'll want to be certain that they brought inflation under control," he stated.