The Bank of Canada is maintaining its target for the overnight rate at the effective lower bound of percent, with the Bank Rate at percent and the deposit rate at percent.
Overall, global GDP is projected to contract by about 4 percent in 2020 before growing by just over 4 percent, on average, in 2021-22.
The Bank says oil prices remain about 30 percent below pre-pandemic levels. Meanwhile, non-energy commodity prices, on average, have more than fully recovered. Despite continued low oil prices, the Canadian dollar has appreciated since July, largely reflecting a broad-based depreciation of the US dollar.
In Canada, the rebound in employment and GDP was stronger than expected as the economy reopened through the summer. The economy is now transitioning to a more moderate recuperation phase. In the fourth quarter, growth is expected to slow markedly, due in part to rising COVID-19 case numbers.
After a decline of about 5 percent in 2020, the Bank expects Canada’s economy to grow by almost 4 percent on average in 2021 and 2022.