The Bank of Canada is keeping its key interest rate unchanged as it releases a downgraded 2019 growth forecast that includes a prediction the economy nearly came to a halt at the start of the year.
The central bank also appears to be in no hurry to move the interest rate any time soon because, unlike recent statements, the announcement today removed all mentions of a need for future increases.
The decision leaves the trend-setting rate at 1.75% for a fourth-straight announcement — a pause that followed governor Stephen Poloz’s stretch of five hikes between mid-2017 and last fall.
The bank says the economy was operating close to full tilt for most of 2017 and 2018 before a sudden deceleration in the final months of last year, which was largely caused by a drop in oil prices and unexpectedly weak numbers for investment and exports.
In new projections today, the bank is predicting growth of real gross domestic product of 1.2% for 2019, down from its January forecast of 1.7%.
The Bank of Canada is projecting growth of just 0.3% in the first quarter of 2019, though it’s predicting the economy to pick up its pace in the second quarter on expectations of stronger housing activity, consumption and business investment.