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B C B U S I N E S S . C A
J A N U A R Y/ F E B R U A R Y
2 0 2 5 Te t e _ e s c a p e / S h u t t e r s t o c k
The main culprit is well known. All
across the developed world, from 2022
through the start of 2024, central banks
jacked up interest rates to control run-
away inflation. The monetary policy did
exactly what it was intended to do, which
unfortunately also entailed trimming eco-
nomic growth.
Here's some good news: 2025 won't be
as bad.
Interest rates are coming down again,
which means families can begin to spend
on other things than servicing debt, com-
panies can consider investing in expansion
and so on. Don't get excited; growth will
likely remain subdued—around 1.5 percent
this year. But it'll be an improvement.
WHY RATES MATTER
"What sets B.C. apart is its lofty average
household debt burden, which is the high-
est among the provinces," wrote TD's eco-
nomics team in the bank's fall provincial
forecast. The high cost of housing here
makes the province uniquely sensitive to
interest rates. So while there still may be
homeowners facing "rate shock" upon
