The Central Bank of Canada’s key rate has remained unchanged since March 27, 2020, at a time when the country’s economy is still recovering after 15 months of health and containment measures.
Despite the country’s rapid progress in recent weeks with a COVID-19 vaccination campaign that heralds an imminent revival of economic activity, the Bank of Canada says it will not raise its key rate as long as it continues. .
Although the growth of the Canadian economy was less than expected in the first quarter of 2021, the Bank of Canada said in a statement that higher-than-expected household spending and an increase in imports during this period left a forecast of increased consumer confidence and demand.
The bank also says it expects a significant rebound in economic activity this summer, as vaccination advances and provincial governments ease economic restrictions.
With regard to raising the key rate, the Bank of Canada believes that the conditions for raising the key rate should not be met before the second half of 2022.
The bank adds that despite the fact that inflation should remain at around 3% throughout the summer, a drop in inflation is expected at the end of the year when
Excess capacity will continue to exert downward pressure on prices.
The stable 2% inflation target sought by the Bank of Canada should not be met until the second quarter of 2022, the institution estimates.
“Certified food fanatic. Extreme internet guru. Gamer. Evil beeraholic. Zombie ninja. Problem solver. Unapologetic alcohol lover.”