Bank of Canada Governor Mark Carney released April 13 the April Monetary Policy Report that found that growth in the United States has solidified but government and household debt will limit growth.
He said growth in Europe has also strengthened despite debt and banking challenges. Meanwhile, demand from emerging markets will keep commodity prices strong, but will contribute to global inflation.
Carney said Canada’s economy has been stronger than expected and the bank expects business investment to continue to rise rapidly while consumer spending will stay in line with personal disposable income.
“Overall, the Bank projects that the economy will expand by 2.9 percent in 2011 and 2.6 percent in 2012. Growth in 2013 is expected to equal that of potential output, at 2.1 percent. The bank expects that the economy will return to capacity in the middle of 2012, two quarters earlier than had been projected in January,” Carney said.
The central bank decided on Tuesday to keep the overnight rate at 1 percent, leaving room for monetary stimulus to spur spending and keep the country in line with a 2 percent inflation target.