26 may 2010
The OECD still thinks the central bank should act confidently and raise the rates.
The global economic outlook didn’t mention how the recent European problems, damaging the stock markets and the Canadian dollar, could influence Canadian future.
This news provoked uncertainty about the central bank raising rates next Tuesday.
“Next BoC announcement will be very important,” – Bank of Nova Scotia economists said. “We think they’ll have 25 basis points hike”.
The OECD also increased its forecast for the Canadian economy: now it’s 3.6% this year and 3.2% – next year.
The Canadian economy is recovering quickly from the recession: the trade sphere and monetary policy measures are contributing for it. But the pace of recovery will, probably, slow down a little bit, because the policy stimulus is reduced and household debts are rising.
The OECD expects the unemployment level to keep falling and inflation pressures to decrease.
It would be good to decrease the stimulus measures in order to avoid the economy overheating, the OECD said. Soon they should give all the details about fiscal consolidation plans and concentrate on spending reductions.