06:56 AM EDT, 10/04/2024 (MT Newswires) -- There is a minority, but "vocal," opinion out there that Canada could face a sharp economic slowdown if the recent rapid population growth rate is curbed abruptly, said Bank of Montreal (BMO).

However, there is no historical evidence that even large changes in population growth have an outsized impact on near-term gross domestic product growth trends, stated the bank.

A BMO chart of year-over-year trends in real GDP and population

growth in Canada suggests that not only is there little immediate

impact on growth, but the correlation has been negative over

time.

Even if the bank leads population growth by a few quarters -- to give the economy time to catch up -- the correlation is still negative.

There is some evidence that the reverse may be true -- strong

economic growth leads to strong population growth later on, added BMO. Even if the bank removes the past few years and the wild COVID-19 distortion, the correlation is still negative.

The bank pointed out it isn't trying to say that higher population growth subtracts from growth -- correlation doesn't imply casualty. What BMO is saying, though, is that a big pullback in population growth also doesn't point directly to a big slowdown in economic growth.