Bank of Canada hikes interest rates, predicts recession in 2023
Ottawa: The Bank of Canada has increased its interest rates by .50 percent from 3.25 percent to 3.75 percent. Since March, the central bank has increased its policy rate six times. All this is being done by the bank to control inflation and meet its earlier target of 2 percent.
According to its latest monetary policy report, the bank has predicted that Canada may face a recession in the first half of 2023.
The report said that in the end of 2022 and the first middle of 2023, the Gross Domestic Product rate is expected to be between 0 percent and 0.5 percent.
The bank has also predicted that Canada’s growth rate could be below 1 percent in 2023 from 3.25 percent this year.
It also said that the global growth rate is also expected to be 1.5 per cent next year. Barring the Covid-19 pandemic and the financial crisis of 2008, no such slow growth rate has been seen since 1982.
Addressing a press conference on Wednesday, Bank of Canada Governor Tiff McCallum said that such a contraction of the economy is not dangerous, but it will definitely slow down the pace of the economy. McCallum also hinted at further increase in interest rates in the coming days.
