When the Bank of Canada made its planned financial announcement this week, the headline that caught every analyst’s attention seemed to be about the brighter future.
The Bank is projecting that consumer spending will mean economic growth of 6.5 per cent this year, 3.7 per cent next year and 3.25 per cent in 2023. This projection is 2.5 per cent higher than in the Bank of Canada’s last quarterly report, and 5.8 per cent higher than what was projected in the federal government’s budget announced last week.
“As vaccines roll out and the economy reopens, consumption is expected to rebound strongly in the second half of this year and remain robust over the projection. Housing construction and resales are at historic highs, driven by the desire for more living space, low mortgage rates, and limited supply. The Bank will continue to monitor the potential risks associated with the rapid rise in house prices.”
At the same time, the bank’s statement was cautious about COVID-19’s impact:
“The recovery remains highly dependent on the evolution of the pandemic and the pace of vaccinations.”
At a press conference, Bank fo Canada Governor Tiff Macklem added:
“Vaccines are rolling out, and there are brighter, brighter days ahead and reflecting that we have revised up our outlook.”
For a webcast of the press conference, go here.