Economic forecasters found 2022 to be a challenging year. A completely new set of shocks triggered the third consecutive year of outsized market swings. On the economic front, inflation was the biggest story with many subplots and unexpected twists accompanied by a surprisingly aggressive central bank response.

Here are our economists' nominations for the top 5 economic and/or financial surprises of 2022:

1. Inflation
   

2. Energy Prices
   

3. Exchange rates
   

4. Bond Yields
   

5. Government finances

What lies ahead is the hard part. Here are 5 of the key trends our economists expect for 2023:

1. Core inflation will prove to be more persistent.
   

2. Central banks take rates higher, not lower, in 2023.
   

3. The aggressive tightening leads to at least a shallow downturn in North America.
   

4. Canadian residential construction will drop heavily, despite ambitious goals to double homebuilding in coming years.
   

5. The U.S. dollar loses altitude broadly, as the end of Fed rate hikes come into view.

For more details, read the full report here.

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