The Bank of Canada maintained its key interest rate at 4.5%. In its announcement, the bank stated that
demand still exceeds supply and economic growth in the first quarter was stronger than expected. The
bank however expects economic growth to be weak for the rest of this year before beginning to pick up
gradually in 2024 and through 2025.
Inflation has declined but is still considered too high at just over 5%. The bank projects inflation to come
down further to around 3% in the middle of this year due to lower energy prices, improved supply chains
and restrictive monetary policy and projects that inflation will reach the 2% target by the end of 2024.
The bank indicated that the effects of past policy rate increases are still working their way through the
economy and that it will continue to monitor economic developments to assess whether monetary
policy is sufficiently restrictive to return inflation to target indicating that it is prepared to raise the policy
rate further if deemed necessary.
The next Bank of Canada announcement is scheduled for June 7th, 2023. I’ll make sure to keep you
informed. As always, if you have any questions, please reach out to me.
Summarized
Kelly MioBertolo,
Mortgage Agent
Mortgage Alliance
