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Canada's new immigration target may impact economic growth, BoC governor says

BY Reuters | ECONOMIC | 10/25/24 02:30 PM EDT

By Promit Mukherjee

OTTAWA, Oct 25 (Reuters) - Canada's new immigration reduction targets announced this week will likely have a bigger impact on the Bank of Canada's growth forecast than on the inflation trajectory, Bank of Canada Governor Tiff Macklem said on Friday.

Macklem, however, said there was a lot of uncertainty on how quickly the immigration curbs would be implemented and the bank was yet to assess the new figures.

"If population growth comes down faster than we have assumed, headline GDP growth will be lower than we assumed," he said.

If household spending recovers more quickly due to continued lowering of borrowing costs by the central bank, economic growth could also be higher, Macklem added. (Reporting by Promit Mukherjee Editing by Ismail Shakil)

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In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.

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