High housing prices in Canada pose a challenge for the Bank of Canada in its fight against inflation, according to a National Bank economist. The country's record population growth has exacerbated housing deficits and kept prices and inflation high. The economist predicts that the central bank will only be able to cut interest rates by a modest 100 basis points in 2024. The demand for housing is outpacing supply, and the impact of population growth on inflation is reflected in the consumer price index's shelter component. The economist also notes that high population growth will require increased government spending on various sectors.
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