The Bank of Canada (BoC) has announced that it is maintaining its target for the overnight rate at 1%.
Global economy
The economic expansion in the United States is progressing at a gradual pace. Europe is in recession and recent indicators point to a continued contraction. In China and other major emerging economies, growth has slowed somewhat more than expected, though there are signs of stabilization around current growth rates.
Despite the slowdown in global economic activity, prices for oil and other commodities produced in Canada have, on average, increased in recent months.
Global financial conditions have improved, supported by aggressive policy actions of major central banks, but sentiment remains fragile. In Canada, while global headwinds continue to restrain economic activity, domestic factors are supporting a moderate expansion.
“Following the recent period of below-potential growth, the economy is expected to pick up and return to full capacity by the end of 2013,” says the BoC, projecting that the economy will grow by 2.2% in 2012, 2.3% in 2013 and 2.4% in 2014.