The Bank of Canada announced today their key interest rate of 0.5% is being maintained. The Bank Rate is steady at 0.75%, while the deposit rate is 0.25%.
Inflation in the country is “evolving broadly,” the bank said in a media release. While the low Canadian dollar is inflating the price of certain imported goods, total Consumer Price Index inflation remains low due to a slow economy and low oil prices.
The low price of oil represents a setback for the Canadian economy, according to the Bank of Canada. They’re predicting the economy won’t start to bounce back until the second quarter of 2016, since the final quarter of 2015 likely showed a stall in GDP growth due to a weak U.S. economy. Part of the process involves getting away from resource activity.
Despite Canada’s economic woes, the Bank of Canada says national employment is steady and household spending is growing.
Canada’s economy is on-track to grow in 2016. The Bank of Canada projects the country’s economy to grow by 1.5 per cent this year and 2.5 per cent in 2017.
Global economic growth, particularly in the U.S. and China, is expected to trend upward for 2016.