In a widely expected decision, the Bank of Canada maintained its target for the overnight rate at 1.75%. Below are some key takeaways from the BoC’s policy statement.
- Global economic growth has slowed by more than the Bank forecast in its January Monetary Policy Report (MPR).
- Global economic activity is expected to pick up during 2019 and average 3 ¼ per cent over the projection period, supported by accommodative financial conditions and as a number of temporary factors weighing on growth fade.
- In Canada, growth during the first half of 2019 is now expected to be slower than was anticipated in January.
- Weaker-than-anticipated housing and consumption also contributed to slower growth.
- Overall, the Bank projects real GDP growth of 1.2 per cent in 2019 and around 2 per cent in 2020 and 2021.
- The Bank expects inflation to remain around 2 per cent through 2020 and 2021.
- Given all of these developments, Governing Council judges that an accommodative policy interest rate continues to be warranted.
- We will continue to evaluate the appropriate degree of monetary policy accommodation as new data arrive.
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