Businesses in Canada are investing less because of the coronavirus pandemic and that situation puts a lid on the economy’s potential to grow, Bank of Canada (BoC) senior deputy governor Carolyn Wilkins said on Thursday, as reported by Reuters.
Additional takeaways
“Canada is likely to exit pandemic with a lower profile for potential output leading to significantly diminished ability to generate goods, services and incomes on a sustainable basis.”
“Canada’s potential output to be about 3%, or C$70 billion, lower by end of 2022 compared with pre-pandemic projections; gap will remain unless output growth picks up.”
“Strong, sustainable growth would help us manage the heavy debt load that has piled up and continues to grow due to COVID-19.”
“Canada’s plan to lift immigration levels will boost potential output growth over time.”
“Governments and the private sector should focus on investments that boost sustainable and inclusive growth in the long-term.”
Market reaction
The USD/CAD pair edged slightly higher after these comments and was last seen gaining 06% on a daily basis at 1.3138.
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