10 Jan Bank of Canada Announces Interest Rate Decision – via Canadian Real Estate Magazine
The Bank of Canada left its trend-setting interest rate unchanged at 1.75% on Wednesday as the sharp decline in oil prices temporarily dims its economic outlook for the coming months.
Before long, however, the central bank expects the economy to expand with renewed vigour. More rate hikes, it stressed, will be necessary “over time”.
In its first policy announcement of 2019, the bank said the recent drop in crude prices will result in slower-than-expected growth in an economy that has otherwise been performing well.
The bank is now projecting growth to be just 1.7% in 2019, down from its October forecast of 2.1% – but it remains optimistic the economy will begin to strengthen again as early as the second quarter of this year.
“The drop in global oil prices has a material impact on the Canadian outlook, resulting in lower terms of trade and national income,” the bank said in a statement.
“Lookingahead, exports and non-energy investment are projected to grow solidly… Indicators of demand should start to show renewed momentum in early 2019, leading to above-potential growth of 2.1 per cent in 2020.”