The Bank of Canada maintained its key overnight
interest rate at 1.75% as expected but cut domestic and global growth
forecasts, saying the Canadian economy would be increasingly tested by trade
conflicts
Canada’s economy would shrink by about 4.5% by
2021 if a global slowdown became more pronounced because of a higher than
expected degree of uncertainty, the Bank of Canada said
The central bank, which has kept rates unchanged
since October 2018 as counterparts around the world ease, said the current
level of stimulus remained appropriate and made no mention of future moves
In its first policy announcement since Prime
Minister Justin Trudeau retained power in an election last week, the central
bank said trade tensions were helping cut business investment and commodity
prices
The
bank revised its 2019 Canadian growth projection upwards to 1.5% from 1.3%
while reducing its 2020 and 2021 forecasts to 1.7% from 1.9% and 1.8% from 2.0%
respectively
