Bank of Canada Delivers Balanced Outlook on Canadian Economy

Apr 20, 2018 | Nick Gill, CFP


Share

This week, the BoC elected to hold the overnight lending rate steady at 1.25%. On global growth, the BoC noted it is tracking along modestly stronger than their January forecast with upward revisions to growth and potential output across many advanced economies. On a domestic front, the BoC notes that the economy continues to operate close to capacity but that growth moderated in the first quarter of this year a little quicker than they expected. They subsequently revised down their 2018 growth forecast from 2.2% to 2.0% while raising their forecast for 2019 to 2.1% from 1.6%. It is worth noting that the domestic demand growth outlook (ignoring trade) in 2018 was actually kept unchanged although the composition of that growth put more emphasis on government spending and business fixed investment with less on consumption or housing.

 

Over the longer term, the BoC expects that trend to continue as higher interest rates and B-20 guideline changes will continue to put pressure on both consumer spending and residential investment. Please Click here to read the report.