Bank of Canada Holds Rate, Lowers Growth Expectations

Reduced commodity prices and record-high household debt are holding back growth.

Bank of Canada governor Mark Carney listens during a high-level public-private sector conference organized by the Institute of International Finance in Mexico City on Feb. 25. The bank has said it will keep the low interest rate of one percent while cutting its forecast for Canada’s growth. Ronaldo Schemidt/AFP/Getty Images

The Bank of Canada is maintaining its low interest rate of one percent but slashing growth projections, the bank said in a July 17 statement.

The bank continues to predict decent growth, at 2.1 percent in 2012 and 2.3 percent in 2013. However, this is down from the 2.4 percent in both 2012 and 2013 predicted by its April 2012 Monetary Policy Report.

The bank expects the economy to operate at full capacity again in the second half of 2013, as opposed to its April projection of the first half 2013.