Bank of Canada Interest Rate Announcement Jan 23, 2013
January 23, 2013
It may be a new year but it is the same story this morning from the Bank of Canada which once again held its target for the overnight rate at 1 per cent. The statement released in support of the interest rate decision noted that the global economic outlook is weaker than the Bank previously projected, though risk of a severe external shock to the economy has diminished. As a result, the slowdown in the Canadian economy in the second half of 2012 was more pronounced than the Bank had anticipated. The Bank has revised its estimate for economic growth in 2012 lower, to 1.9 per cent, and now forecasts 2 per cent growth in 2013 before an acceleration to 2.7 per cent in 2014. Importantly, the Bank has also shifted its expectation that the economy will reach full capacity out to the second half of 2014. On inflation, the Bank expects growth in consumer prices to run significantly below its 2 per cent target for much of 2013 before gradually rising to target in 2014.
Following two years of overly optimistic forecasts, the Bank has struck a slightly more dour tone in its outlook. The gloomier growth forecast and positive signs that households are reigning in household debt have prompted the Bank to revise its language on the gradual withdrawal of monetary stimulus. In its concluding statement accompanying the rate decision, a key focus of monetary policy watchers over the past year, the Bank continued to note that a withdrawal of stimulus would likely be required over time, but that the timing of any such withdrawal is less imminent than previously anticipated. This strongly suggests that interest rates will remain constant at 1 per cent for all of 2013.
Copyright British Columbia Real Estate Association. Reprinted with permission. BCREA makes no guarantees as to the accuracy or completeness of this information.
The data relating to real estate on this website comes in part from the MLS® Reciprocity program of either the Real Estate Board of Greater Vancouver (REBGV), the Fraser Valley Real Estate Board (FVREB) or the Chilliwack and District Real Estate Board (CADREB). Real estate listings held by participating real estate firms are marked with the MLS® logo and detailed information about the listing includes the name of the listing agent. This representation is based in whole or part on data generated by either the REBGV, the FVREB or the CADREB which assumes no responsibility for its accuracy. The materials contained on this page may not be reproduced without the express written consent of either the REBGV, the FVREB or the CADREB.
Post Your Comment: