Scotiabank’s Fall 2024 economic forecast offers crucial insights into Canada’s financial world and global market trends. As one of the country’s leading financial institutions, Scotiabank’s projections carry significant weight for investors, businesses and everyday Canadians planning their financial future.
The forecast delves into key economic indicators including GDP growth, inflation rates and interest rate predictions for the coming year. With ongoing market uncertainties and shifting global dynamics, understanding these projections can help you make informed decisions about investments, mortgages and other financial matters that’ll impact your wallet in 2024 and beyond.
Scotiabank’s Economic Growth Projections for 2024
Scotiabank’s latest economic forecast reveals varied growth rates across major economies for 2024. The projections indicate a general moderation in economic expansion compared to 2023 performance levels.
GDP Growth Expectations
Global economies show diverse growth trajectories in Scotiabank’s 2024 forecast:
Country/Region
2024 Growth
2023 Growth
Canada
0.5%
1.1%
United States
1.3%
2.4%
Mexico
3.1%
3.4%
UK
0.6%
0.6%
Eurozone
0.4%
0.5%
China
4.5%
5.2%
Japan
0.9%
1.7%
Labor Market Outlook
Employment metrics indicate shifting dynamics across sectors. Key trends point to moderate job creation rates with regional variations in employment growth. Market conditions suggest stabilization in workforce participation levels through 2024.
Interest Rate and Monetary Policy Forecast
Scotiabank’s fall 2024 forecast outlines significant changes in Canada’s monetary policy world. The bank projects substantial interest rate adjustments that affect lending rates and economic conditions across the country.
Bank of Canada Rate Predictions
Scotiabank economist Derek Holt forecasts the Bank of Canada’s policy rate to drop to 4% by late 2024, down from its 5% peak. The bank expects further reductions to 3% by 2025, positioning its outlook as more conservative than competitors who predict rates between 2% to 2.5%.
Impact on Canadian Dollar
Scotiabank’s prime lending rate decreased to 5.95% from 6.45% in October 2024, reflecting the Bank of Canada’s anticipated rate cuts. These rate adjustments influence borrowing costs, lending practices and overall monetary conditions for Canadian businesses and consumers.
Interest Rate Metrics
Current/Peak
2024 Forecast
2025 Forecast
BoC Policy Rate
5.00%
4.00%
3.00%
Prime Lending Rate
6.45%
5.95%
Not specified
Housing Market Analysis
Market conditions tightened significantly in October 2024, with sales rising strongly and new listings declining. The sales-to-new listings ratio improved in more than 85% of tracked markets from September to October.
Price Trends and Affordability
Canadian home prices show a projected decline of 3.7% in the base case scenario for the 12-month period starting January 31, 2024. The optimistic scenario indicates a 3.2% price drop with a subsequent 3.8% growth in the following period.
Mortgage Rate Forecasts
Mortgage rates align with Scotiabank’s prime lending rate reduction to 5.95% from 6.45%. The Bank of Canada’s policy rate projects a decrease to 4% by late 2024 from its 5% peak, with further cuts to 3% anticipated by 2025.
Key Industry Sector Predictions
Scotiabank’s 2024 forecast reveals specific trends across major industry sectors, with varying growth patterns and economic indicators shaping the outlook for Canadian businesses.
Manufacturing and Exports
Manufacturing faces a moderate slowdown with Canada’s real GDP growth projected at 0.5% in 2024, down from 1.1% in 2023. The USDCAD exchange rate drop to 1.28 enhances export competitiveness, while reduced interest rates at 4.00% lower manufacturing borrowing costs.
Services and Retail
Based on the economic indicators, the services sector experiences adjustments aligned with the broader economic slowdown. The retail environment adapts to evolving consumer spending patterns as interest rates decrease from 5% to 4% by late 2024, impacting purchasing power and business operations.
Regional Economic Performance
Scotiabank’s 2024 economic forecast reveals distinct growth patterns across different regions, with variations in GDP expectations reflecting broader economic trends. The analysis shows moderate growth rates compared to 2023 performance levels.
Canada’s Economic Outlook
Canada’s real GDP growth rate projects at 0.5% for 2024, marking a decline from 1.1% in 2023. The forecast extends to 2025 with an anticipated growth of 2.5%, indicating a gradual economic recovery pattern.
International Markets
Key international markets display varying growth trajectories:
U.S. economy: 1.3% growth in 2024 (down from 2.4% in 2023)
Eurozone: 0.4% growth in 2024 (slight decrease from 0.5% in 2023)
China: 4.5% growth in 2024 (reduction from 5.2% in 2023)
Provincial Growth Disparities
Provincial economic growth rates show notable variations across Canada’s regions. Resource-rich provinces maintain stronger growth prospects, while manufacturing-focused regions experience moderate expansion. Eastern provinces demonstrate stable but conservative growth patterns in 2024.
Major Metropolitan Areas
Major urban centers lead economic activity with Toronto Vancouver Montreal showing resilient growth indicators. These metropolitan areas demonstrate stronger employment rates higher consumer spending increased housing market activity compared to smaller urban regions.
Global Economic Factors
Scotiabank’s 2024 forecast indicates significant changes in global economic dynamics. The US dollar faces downward pressure due to shifting international currency relationships.
US-Canada Trade Relations
Trade patterns between the US and Canada show increasing complexity in 2024. The anticipated decline in US dollar value creates opportunities for Canadian exporters while impacting cross-border trade dynamics. The USDCAD exchange rate target of 1.28 strengthens Canada’s competitive position.
International Market Influences
BRICS nations (Brazil Russia India China South Africa) lead efforts to reduce US dollar dominance in global transactions. The alliance promotes local currency usage for cross-border payments creating alternative payment systems. Interest rate differentials between major economies contribute to currency value adjustments.
Economic Indicator
2024 Forecast
USDCAD Rate Target
1.28
US Dollar Trend
Declining
BRICS Impact
Increasing
Conclusion
Scotiabank’s 2024 fall forecast paints a picture of moderate economic growth with strategic opportunities ahead. You’ll see significant shifts in interest rates monetary policy and housing markets that will shape Canada’s financial world throughout the year.
While challenges persist the outlook remains cautiously optimistic with projected improvements in key economic indicators by 2025. Your financial decisions in 2024 will benefit from understanding these projections especially about interest rates mortgage planning and investment strategies.
The forecast suggests a transformative period ahead marked by regional variations currency fluctuations and evolving global trade dynamics. You’re well-positioned to navigate these changes by staying informed and adapting your financial plans to align with these economic projections.
As part of its response to Canada’s ongoing housing challenges, the federal government has added another 12 new properties to the Canada Public Land Bank,...
As part of its response to Canada’s ongoing housing challenges, the federal government has added another 12 new properties to the Canada Public Land Bank,...
