Canada experienced a technical recession in 2023

The Canadian Chamber of Small Business (CFIB) on Tuesday predicted that the Canadian economy will experience a technical recession in 2023.

A technical recession occurs when a country's gross domestic product (GDP) declines for two consecutive quarters.

The CFIB forecast that Canada's gross domestic product will contract by 0.3% in the third quarter of 2023 and by 0.2% in the fourth quarter.

The group also predicted that Canada's GDP would grow by just 1.5% in 2024.

"High interest rates, high inflation and the war in Ukraine have all had a negative impact on the Canadian economy," said CFIB Chief Economist Jeff Dove.

**Dove said Canada's economic growth will slow in 2023 due to the following factors:

High interest rates: The Bank of Canada has raised interest rates in an effort to curb inflation. This increases the cost of borrowing for businesses and households and can affect economic growth.
High Inflation: Inflation in Canada is currently at 7.7%, the highest level in 31 years. High inflation can lead to a decrease in the purchasing power of consumers and can affect economic growth.
War in Ukraine: The war in Ukraine has increased oil and gas prices. This can lead to an increase in inflation and can affect economic growth.
Dove said that if the Bank of Canada cuts interest rates quickly, it could avoid a recession.

"The central bank should adjust its monetary policy in such a way that it curbs inflation, but avoids economic stagnation," Dove said.

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