1 April 2019

An unexpected economic slowdown in the last quarter of 2018 combined with concerns over the global outlook made the markets predict even a rate cut as the next move by the Bank of Canada.

Meanwhile, Poloz pointed to certain signs of Canada adjusting to domestic and international challenges, stating the slowdown is temporary.

According to him, Canada’s economy has been showing signs of strength, e.g. 350,000 new jobs in 2018, growing wages and strong exports in services.

As you know, Poloz left the BoC key lending rate unchanged in March, pointing to stronger uncertainty about the timing of future hikes. The reason was the fact that Canada showed weaker performance, caused mainly by lower oil prices and a cooling real estate sector.

It was the third meeting in a row when the rate remained at 1.75%. Earlier, Poloz reacted to Canada’s stronger economic results by raising the rate five times from mid-2017 to last fall. The BoC was ready to go on with the hikes until the end of 2018.

“The national economic growth slowed late last year, and we can see this weakness continuing in 2019”, – Poloz noted.

“The data we receive provides quite a mixed picture, the results should be carefully monitored.”

The next interest-rate meeting is on April 24. It will be accompanied by the Bank’s new economic forecasts.