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Originally Posted by chemgear
That's not how this works. That's not how any of this works. LOL, a central bank cuts interest rates because things are getting bad not because things are good. What kind of ignorant banana republic nonsense is this?
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I mean, it was RBC that predicted per capita GDP to increase in the 2nd half of 2025, not the government. And it's not a particularly outlandish prediction, even if we do see some sort of downturn.
Over the last several years (including the COVID recession), real GDP has increased faster than labor force growth, so GDP per worker (which is a more important measure than per capita) has been going up. What has been driving the reduction in per capita GDP has been non-labor force population growth. If that is slowed through fewer temporary students coming in, then the denominator changes and per capita GDP would tend to rise. Particularly as new immigrants who are part of the labor force become more productive, which is generally what happens.
There is normally a lag in per capita GDP responding to changes in population growth rates, and that's what we're seeing now. We saw the same thing during COVID (but in the opposite direction) when immigration basically stopped and population growth was very low. Per capita GDP grew by over 4% from Q1 2020 to Q1 2022 even though we had a recession in there, and that was because the population growth stalled, keeping the denominator artificially low. But obviously if that situation continued, then per capita GDP wouldn't have continued to rise indefinitely because the lack of population growth would lead to slower economic growth. And a similar effect is happening now, where we're adding population, but the positive economic effects will be felt in future years.