The Bank of Canada lowered its forecast for economic growth as it announced that it is holding its trendsetting overnight interest rate steady at its current level of 5%.
The central bank is now forecasting that Canada’s economy will grow 1.2% in 2023 before falling to 0.9% in 2024.
The Bank of Canada expects economic growth to rebound to 2.5% in 2025.
The projections represent a downgrade from what the central bank was expecting previously when it called for economic growth of 1.8% this year.
The Bank of Canada said it revised its projections after recent data showed a slowdown in the economy and declining inflation.
The latest economic growth forecast notes a decline in household spending, as well as the impacts on the economy from ongoing wildfires and labour strikes across the country.
Speaking to media, Bank of Canada Governor Tiff Macklem said that an economic recession in Canada still cannot be ruled out, though the central bank is not forecasting one at this time.
