Bank of Canada maintains key interest rate of 0.5%

Bank of Canada

The Bank of Canada announced Wednesday that they’re maintaining the key interest rate of 0.5%.

Globally, the world’s economy is expected to strengthen gradually, but more slowly than the January Monetary Report suggested. While the US economy is forecasted to gain some momentum in 2016, the lower profile and composition will result in unfavourable conditions for Canadian exports.

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SEE ALSO: Employment grew by 41,000 in Canada in March: Stats Can

The price of oil has risen more than the Bank of Canada initially predicted, but are still well below historical averages – in spite of the rise, more energy sector investment cuts are likely on their way for Canada than January predictions suggested.

Due to the shock of oil prices here in Canada, the bank predicts economic growth will be slow as we continue to adjust. With that said, first-quarter GDP results were unexpectedly strong, largely because of temporary factors that will adjust in the second quarter.

The economy is, however, creating new jobs. Statistics Canada says employment grew by 41,000 in the month of March, largely in the healthcare and social assistance industries, as well as food services and hospitality.

The Bank of Canada is now predicting real GDP growth of 1.7% in 2016, 2.3% in 2017, and 2% in 2018.

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Lauren Sundstrom Lauren is a Staff Writer and Projects Assistant at Vancity Buzz. She is a graduate of BCIT's Broadcast and Online Journalism program. She loves reporting on breaking news and lifestyle content. If you feel like you have a story that needs to be told, fire her a tweet.

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