The Bank of Canada has downgraded the country’s economic growth outlook again, while holding its key interest rate stead at 0.5 per cent.
A new report from the bank points to weaker exports as the main reason for the reduced forecast.
The central bank also predicts growth will take a hit from the expected decline in real estate activity that will follow the federal government’s new measures to stabilize the housing market.
The bank is now projecting Canada’s real gross domestic product will expand by just 1.1 per cent this year, down from the July projection of 1.3 per cent. For next year the bank is forecasting growth of two per cent, down from the previous projection of 2.2 per cent.
Still, the bank says Canada’s economy should rebound over the final half of this year from a second quarter contraction, thanks to global and U.S. momentum.