In an expected move, the Bank of Canada, in its meeting moments ago, raised the interest rate by 25 basis points to 5% from 4.75%.
The interest report issued by the bank stated that the Canadian economy was stronger than expected, and that consumer growth was strong at 5.8% in the first quarter, but the bank expects economic growth to slow by 1% on average during the second half of this year, which means real GDP growth by 1%. 1.8% this year and 1.2% next year.
Inflation in Canada eased to 3.4% in May, which is a significant and welcome decline from its peak of 8.1%. However, the downward momentum was driven by lower energy prices and thus the decline in core inflation came less than expected.
The bank’s expectations for the month of July were that the consumer price index for the next year would hover at 3% and gradually decrease to 2% in the year 2025.
The markets are awaiting the statements of the Governor of the Central Bank of Canada, Tiff Macklem, after less than an hour in the press conference that follows the statement.
24/12/2024
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