Bank of Canada Cuts Interest Rates by 0.25 Percentage Points to 4.5%
Today, the Bank of Canada (BoC) lowered its benchmark interest rate by 0.25 points to 4.5%, continuing policy normalization started in June. Previously, the bank had similarly lowered its rate.
The BoC’s announcement projects global economic growth at about 3% annually until 2026.
Moreover, it highlighted that although inflation exceeds central bank targets in most developed economies, it should decrease gradually.
Regarding Canada’s economy, the BoC observed significant acceleration. Economic growth likely rose to 1.5% in the second quarter, then to 3.8% in the third, with steady growth expected thereafter.
Concurrently, the labor market exhibits stagnation signs. Notably, the unemployment rate climbed to 6.4%, outpacing employment growth compared to the active population.
Despite some moderation, wage increases remain considerably high. Looking ahead, the GDP forecast for Canada appears promising.
Expectations suggest a growth surge in late 2024 through 2025, driven by robust exports and reviving household and business investments as loan costs fall.
The BoC forecasts GDP growth rates of 1.2% in 2024, 2.1% in 2025, and 2.4% in 2026. This economic boost is poised to gradually neutralize excess supply by 2025 and beyond into 2026.
Additionally, the Consumer Price Index (CPI) showed a decrease to 2.7% in June, with diminishing cost pressures.
Core inflation is also expected to fall, reaching approximately 2.5% in late 2024 and continuing its decline through 2025. For this year’s third quarter, the anticipated CPI stands at 2.3%.
Bank of Canada Cuts Interest Rates by 0.25 Percentage Points to 4.5%
This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error
LatAm Markets: Live Signals → — real-time movers, turnover leaders and FX across Latin America.
Read More from The Rio Times