Another interest rate cut appears to be not advisable anytime soon as a new poll by Reuters found that Canadian economic growth will accelerate below the central bank’s expectations in the second half of the year.
More than 40 economists surveyed predict Canada's economy will grow 2.0 per cent this year and 2.2 per cent in 2016, a downgrade January’s forecast for 2.4 and 2.3 per cent, respectively.
The figure, Reuters
reported, is also “much lower than predictions for the United States, which is expected to grow 2.8 per cent.” Even the most pessimistic growth forecasts for Canada, 1.5 per cent and 1 per cent for this year and next, are also lower.
The report also said economists expect annualized growth of 1.8 per cent in Q3 2015 and 2.2 per cent in the fourth quarter, compared with the central bank's 2.8 per cent and 2.5 per cent forecast, respectively. Despite this, their expectations were nearly in line with the central bank's forecast for 1.9 per cent this year.
The Bank of Canada (BoC) launched an unexpected interest rate cut in January but never touched the rates again at 0.75 per cent. BoC Governor Stephen Poloz last week hinted that no further cuts were imminent. Lenders may also have to hush before changing their
mortgage rates across Canada.
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