24 April 2019

The Bank left its interest rate at 1.75%. As you know, the rate was raised five times since July 2017, and there were no changes at four previous meetings.

Now, the Bank of Canada predicts a lower economic growth in Q1, than it was expected in January. The reasons for that are: a lower activity in the oil industry, the negative influence of global trade tendency and a weaker-than-expected real estate sector.

The central bank also reduced its GDP growth expectations from 1.7% to 1.2%, saying it’s monitoring closely the influence of household spending, oil markets and global trade.

“It’s quite a dovish tone,” – noted Andrew Kelvin from TD Securities. “It looks like the Bank is starting to admit that 1.75% is the peak of its increases cycle”.

The overall inflation rate is expected to go down in Q3 and then to rebound to 2%, which is the middle of the Bank’s 1%-3% target limits. In 2020 and 2021, the inflation is expected to remain at about 2% as well.

Next Bank of Canada rate decision is on May 29.