The Bank of Canada's (BOC) latest summary of deliberations highlighted headwinds for the global economy, noting that the surprising resilience of US consumer spending is helping to soften downside risks.
The BOC remains concerned about the Canadian economy stagnating in the second half of 2023, while inflation looks set to remain above 2% until sometime in 2025.
Main conclusions
Global growth has slowed, but not as much as forecast in the October Monetary Policy report, mainly due to stronger-than-expected growth in the United States.
Canada's economic growth had stalled since mid-2023. However, they expressed concern that unless productivity growth was exceptionally strong, wage growth in this range could contain inflation.
Overall, the Governing Council expected economic growth to remain weak in the first half of 2024, before picking up in the second half. Inflation was expected to remain around 3% during the first half of the year, before gradually moderating and reaching the 2% target in 2025.
With inflation still too high and widespread, members wanted to make clear in their communications that they remained concerned about the persistence of underlying inflation.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
