A majority of economists expect the Bank of Canada to keep its trendsetting overnight interest rate at its current level of 4.50% for the remainder of this year, according to a poll by the Reuters News Agency.
A declining housing market, weak business investment, and tepid consumer spending show that Canada’s economic growth is slowing and that is likely to keep the central bank on the sidelines for the rest of 2023, say economists.
All 32 economists polled by Reuters between February 24 and March 3 said they expect the Bank of Canada to hold its overnight interest rate at 4.50% at its next policy meeting scheduled for March 8.
Most economists also forecast that the central bank will keep the overnight rate at 4.50% for the rest of the year even though the U.S. Federal Reserve is expected to continue raising interest rates south of the border.
Among economists polled, 17 said they expect the Bank of Canada’s key interest rate to still be at 4.50% at year’s end, while 13 economists forecast it will be lower and two said it would be higher.
The latest data showed that Canada’s inflation rate slowed by more than expected to 5.90% in January, though it remains well above the central bank’s 2% annualized target.
