The bank said in a statement that it intends to hold the policy interest rate until the economy is recovered, possibly in the second half of 2022, moved up from an earlier prediction of 2023.
Canada’s inflation rate was at 2.2 per cent in March, according to Statistics Canada results released Wednesday, but the bank said such numbers are expected over the next few months due to the price of some goods and services falling sharply at the beginning of the pandemic.
The central bank expects economic growth to temper to 3.7 per cent next year and 3.25 per cent the year after.
The federal budget forecasted four per cent next year, and 2.1 per cent the year after.
‘The most important factor in the unexpected economic strength has been the resilience and adaptability of Canadian households and businesses,’ bank governor Tiff Macklem said in a conference with the media.
Macklem said the second wave had much less economic impact than the first wave, with a quick bounceback and substantial job gains in February and March.
He added that Canada´s growth in the first quarter ‘appears to be considerably stronger’ than expected in January, with a substantial employment rate rise in February and March.