There was little expectation going into 2022 that B.C. would be able to maintain last year’s surge of economic growth following in the wake of initial pandemic paralysis.
But the province now appears to have become a “victim of its own success,” according to TD economists who forecast growth will fall a full point to 3.8 per cent in 2022 compared with a year earlier.
“A strong recovery from the pandemic has fuelled intense labour shortages. This challenge is likely to keep the province from achieving even stronger growth this year,” Friday’s report stated.
Earlier this month the Bank of Canada hiked its overnight rate for the first time since 2018 – a vote of confidence for the strength of the economy as well as an effort to tamp down on record inflation.
Central banks across the globe slashed rates to record lows in the wake of the pandemic to inject cheap capital into the economy and keep investment flowing. But that flood of capital, coupled with unprecedented supply chain disruptions, helped drive Canada’s annual rate of inflation to 5.7 per cent as of February – a level not seen since August 1991…read more.