Ottawa, April 10
The Bank of Canada on Wednesday held its key interest rate at 5%. It is the sixth consecutive time since July that the Bank has not changed its key interest rate.
In a press release on Wednesday, the Bank of Canada said that it expects the global economy to continue growing at a rate of about 3%, with inflation in most advanced economies easing gradually.
“The Bank has revised up its forecast for global GDP growth to 2¾ in 2024 and about 3% in 2025 and 2026. Inflation continues to slow across most advanced economies, although progress will likely be bumpy. Inflation rates are projected to reach central bank targets in 2025,” the bank said in a press release.
“In Canada, economic growth stalled in the second half of last year and the economy moved into excess supply. A broad range of indicators suggest that labour market conditions continue to ease. Employment has been growing more slowly than the working-age population and the unemployment rate has risen gradually, reaching 6.1% in March. There are some recent signs that wage pressures are moderating,” the bank said.
The statement issued by the Bank of Canada said, “Residential investment is strengthening, responding to continued robust demand for housing. The contribution to growth from spending by governments has also increased. Business investment is projected to recover gradually after considerable weakness in the second half of last year. The Bank expects exports to continue to grow solidly through 2024.”
In February, inflation slowed to 2.8%, with easing in price pressures becoming more broad-based across goods and services.
The bank aims to bring the inflation to 2% by next year. The next meeting of the bank will be held on June 5 when the decision on key rate interest will be taken.