In keeping with its previous forecast, real GDP growth in Canada will be at a virtual standstill for the rest of 2023, according to a report by The Conference Board of Canada. Real gross domestic product will grow at a modest rate of 0.9% for the rest of 2023, followed by 1.4% growth in 2024.

“Concerns about the US financial system are unlikely to be mirrored in Canada given our country’s more concentrated banking system,” said Ted Mallett, director of economic forecasting at The Conference Board of Canada. “The indirect effects will be muted, and business investment was already expected to be weak in Canada, so there is relatively little business lending to pull back.”

Despite the progress made, inflation is still weighing down Canada’s economy, according to the report.

However, the report noted that Canada’s labor market has seen an impressive start in 2023, fueled by an uptick in population growth. In addition, international migration has risen sharply in recent quarters, driven by record immigration targets and increased admissions of non-permanent residents, including temporary foreign workers.