{"id":6519,"date":"2021-01-20T21:41:26","date_gmt":"2021-01-20T21:41:26","guid":{"rendered":"https:\/\/www.pantheregroup.com\/2021\/01\/20\/bank-of-canada-sees-economy-shrinking-in-first-quarter-as-second-wave-makes-for-choppy-recovery\/"},"modified":"2021-01-20T21:41:26","modified_gmt":"2021-01-20T21:41:26","slug":"bank-of-canada-sees-economy-shrinking-in-first-quarter-as-second-wave-makes-for-choppy-recovery","status":"publish","type":"post","link":"https:\/\/www.pantheregroup.com\/2021\/01\/20\/bank-of-canada-sees-economy-shrinking-in-first-quarter-as-second-wave-makes-for-choppy-recovery\/","title":{"rendered":"Bank of Canada sees economy shrinking in first quarter as second wave makes for choppy recovery"},"content":{"rendered":"<div style=\"text-align:center\"><\/div><p> \n<\/p>\n<div id=\"\">\n<h2 class=\"visually-hidden\">Article content continued<\/h2>\n<p>Overall, the Bank of Canada predicts growth of four per cent in 2021, compared with a previous estimate of 4.2 per cent, 4.8 per cent in 2022 and 2.5 per cent in 2023.<\/p>\n<p>\u201cWe\u2019re moving in the wrong direction right now,\u201d Macklem said. \u201cWe\u2019re starting off in a deeper hole. We\u2019ve got to climb back out of that.\u201d<\/p>\n<p>The shift in circumstances highlights the fragility of the recovery from one of the most epic recessions in history. Canada\u2019s ability to generate wealth will be determined by the public health system\u2019s ability to keep up with the coronavirus. There\u2019s enough money in the system to power growth, but businesses and households won\u2019t spend it freely until the disease is brought under control.<\/p>\n<p>\u201cThat is what will determine everything,\u201d said Darcy Briggs, a Calgary-based portfolio manager at Franklin Templeton Canada.<\/p>\n<p>Macklem <a href=\"https:\/\/www.bankofcanada.ca\/2021\/01\/opening-statement-200121\/\" rel=\"noopener noreferrer nofollow\" target=\"_blank\">reiterated<\/a> that he intends to leave the benchmark interest rate at 0.25 per cent until some point in 2023, and that the central bank would continue to create roughly $4 billion per week to purchase Government of Canada bonds, an approach to monetary policy that puts downward pressure on borrowing costs by augmenting private-sector demand for bonds.<\/p>\n<p>Extraordinary stimulus remains essential, in part, because Canada\u2019s economy has run into additional headwinds. The immediate future of the oil industry is clouded by mediocre prices, uncertain demand and TC Energy Corp.\u2019s decision to stop building the Keystone XL pipeline in the face of political opposition in the United States. The dollar\u2019s appreciation has become so problematic that the Bank of Canada felt compelled to flag it as a key risk to its inflation outlook, something it hasn\u2019t done so explicitly since 2011.<\/p>\n<\/div>\n\n<br \/><a href=\"https:\/\/financialpost.com\/news\/economy\/bank-of-canada-holds-key-interest-rate-at-0-25\" rel=\"nofollow noopener\" target=\"_blank\">Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Article content continued Overall, the Bank of Canada predicts growth of four per cent in 2021, compared with a previous estimate of 4.2 per cent, 4.8 per cent in 2022&#8230;<\/p>\n","protected":false},"author":2,"featured_media":6520,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"","fifu_image_alt":"","footnotes":""},"categories":[23],"tags":[],"class_list":["post-6519","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business-news"],"_links":{"self":[{"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/posts\/6519","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/comments?post=6519"}],"version-history":[{"count":0,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/posts\/6519\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/media\/6520"}],"wp:attachment":[{"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/media?parent=6519"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/categories?post=6519"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/tags?post=6519"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}