The Bank of
Canada (BoC) left its benchmark interest rates unchanged at 5.00 per cent on
Wednesday, as widely expected. It was the Bank's fourth straight meeting on hold. The Canadian
central bank also reiterated it is to continue to normalize its balance sheet.
In its policy
statement, the Canadian central bank noted:
- Global
economic growth continues to slow, with inflation easing gradually across most
economies;
- BoC now sees
global GDP growth of 2.5% in 2024 and 2.75% in 2025;
- Inflation
rates in most advanced economies are expected to come down slowly, reaching
central bank targets in 2025;
- Canada’s
growth will likely remain close to zero through the first quarter of 2024. It is
expected to strengthen gradually around the middle of 2024;
- Overall, BoC
forecasts GDP growth of 0.8% in 2024 and 2.4% in 2025, roughly unchanged from
its October projections;
- BoC expects
inflation in Canada to remain close to 3% during the first half of this year
before gradually easing, returning to the 2% target in 2025;
- Governing Council is still concerned about risks to the outlook for inflation, particularly
the persistence in underlying inflation;
- Governing
Council wants to see further and sustained easing in core inflation and
continues to focus on the balance between demand and supply in the economy,
inflation expectations, wage growth, and corporate pricing behaviour;
-
BoC remains resolute in its commitment to restoring price stability