Central bank keeps interest rate at one per cent
Posted Jan 17, 2012 7:55 am.
This article is more than 5 years old.
The Bank of Canada is keeping its trendsetting policy rate at one per cent for another two months and also raised its prediction for 2012 economic growth slightly to two per cent.
The central bank says economic conditions around the world are deteriorating, but not necessarily for Canada.
The bank says Canada performed better than expected in the second half of 2011, which will result in the economy returning to normal a quarter sooner than it had expected in the fall.
But the bank says the output gap in the economy will not be fully closed until the third quarter of 2013.
As for growth, the bank says the economy expanded by 2.4 per cent in 2011, three notches better than its earliest forecast, but will slow to two per cent this year before picking up steam to 2.8 per cent in 2013.
The last two years were roughly in line with the bank’s views in its fall economic statement.
