October 28, 2020, by Pete Evans
The Bank of Canada says it has no plans to change its benchmark interest rate until inflation gets back to 2% and stays there, something it says isn’t likely to happen until 2023. The central bank said it has decided to keep its benchmark interest rate steady at 0.25%.
The central bank says it expects Canada’s economy will shrink by 5.7% this year, but grow by 4.2% next year, and 3.7% in 2022. Inflation, meanwhile, is expected to be 0.6% this year, 1.0% next year, and 1.7% in 2022.
Those growth and inflation projections, however, are based on two leaps of faith: that there won’t be a second — or third — widespread lockdown in Canada, and that a vaccine or some sort of effective treatment will be widely available by the middle of 2022 at the latest.
What does this mean?
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