This annual economic forecast presents Canada’s long-term monetary policy outlook.
Documents Highlights
- The Bank of Canada will not increase short-term interest rates until early 2023 due to weak domestic and global economic growth.
- Rates will then increase until they reach the neutral interest rate of 1.75 per cent in 2026.
- Consumer prices are expected to rise at an annual pace of around 2.0 per cent over the long term.
- The Canadian dollar will slowly appreciate to hit US$0.80 and will trade around this level through the long term, as we do not foresee a return to par against the U.S. dollar. This is due mainly to world oil prices that are not expected to surpass US$90 per barrel even by the end of 2040.
