July 15, 2020: The Bank of Canada announced Wednesday it is leaving its benchmark interest rate unchanged at 0.25 percent, saying the national and global economic outlook is uncertain because of the pandemic.
The bank also presented what it called a central scenario for global and Canadian growth, rather than economic projections as it usually does each month.
One of the assumptions in the scenario is that there is no widespread second wave of the coronavirus.
Under this scenario, Canadian GDP will decline by 7.8 percent in 2020 and resume with growth of 5.1 percent in 2021 and 3.7 percent in 2022.
These figures are worse than ones released last week by Finance Minister Bill Morneau, who said he expected the economy to shrink by 6.8 percent this year and grow by 5.5 percent in 2021.
The bank's scenario also foresees the world economy contracting by five percent this year, then growing by an average of nearly five percent in 2021 and 2022.
The bank said it would keep its benchmark rate — the overnight lending rate — at its current level until the goal of getting inflation up to two percent is achieved. It did not specify when this might happen.