85221
Bank of Canada Says Economy Improving
Bank of Canada Says Economy Improving

Bank of Canada Says Economy Improving

Bank of Canada Says Economy Improving

Bank of Canada Governor Stephen Poloz on Monday gave an upbeat assessment of the economy’s prospects after a sluggish first quarter and said that while inflation this year would rise above the central bank’s target, it would be temporary.
Poloz, in testimony to the House of Commons’ Finance Committee, reiterated that while higher interest rates would likely be warranted over time, some policy accommodation is still required to keep inflation on track, Reuters reported.
Pointing to the bank’s outlook for inflation of 2% two years from now, Poloz said policymakers are confident they have the right modeling and framework to guide interest rate decisions.
“Given what our outlook is, we’ve got monetary conditions roughly where they should be, and in that context, the fact that inflation is rising above 2% for now is due to temporary factors and we can see through them,” he told the committee.
The central bank held rates steady last week at 1.25% after hiking three times since last July, but said more interest rate hikes would be coming amid rising wage growth and inflation. Financial markets expect one or two more rate hikes this year from the bank BOCWATCH.
Poloz said policymakers are watching wages, which he said will pick up as job vacancies continue to grow, and will in turn encourage more people to enter the workforce.
“We are just now in the last six months reaching wage movements that are actually positive in real terms, above 2%. And so that’s a really important bridge to cross and when we get up to the 2.5-to-3% zone, then we have got more scope for getting faster reintegration of people back into the workforce,” he said.
Poloz reiterated his expectation that business investment and export growth will soon contribute more to economic growth, which has until now mostly been driven by households and government spending. “I am hopeful that when we get past the bottlenecks that we saw during in the winter time, that we’ll get some clearing of inventory out and exports will rebound,” he said.
The Canadian dollar, which hit a near three-week low on Monday at C$1.286, steadied around C$1.284 after Poloz’s remarks.
Poloz over the weekend said he expects the inflation rate to be above the central bank’s 2% target in 2018, but he is comfortable with that as long as the long-term trend is steady, according to media reports published on Sunday.

Short URL : https://goo.gl/odGv2B
  1. https://goo.gl/tpfxmT
  • https://goo.gl/EvcGXd
  • https://goo.gl/pDiyFR
  • https://goo.gl/Gnzvro
  • https://goo.gl/tXHAjo

You can also read ...

An expanding trade war threatens to squeeze incomes.
The untold story of the world economy—so far at least—is the...
Russia has been seeking ways of decreasing dependence  on the US currency.
One of Russia’s largest banks, VTB is seeking to decrease the...
Uncertainty abounds in Malaysia, where a two-month-old government is only starting to give  a clearer picture of economic policy.
For Southeast Asia's biggest economies, 2018 wasn't supposed...
PwC Says Australian Firms Deliberately Going Broke
Companies that deliberately fail are costing the Australian...
Asian Stocks Retreat, European Shares Mixed
Asian stocks closed lower on Monday as investors digested the...
Turkey Budget Deficit Expands
Turkey’s central government budget balance recorded a deficit...
Chinese Premier Li Keqiang (C) shakes hands with Jean-Claude Juncker (L) and Donald Tusk after the meeting in Beijing on Monday.
China could open its economy if it wished, European Commission...
Experts Say China Can Cope With Uncertain H2
China is confident it can cope with a more uncertain second...

Add new comment

Read our comment policy before posting your viewpoints

Trending

Googleplus