Reuters recently conducted a survey on the probability of further action by the Central Bank of Canada (BoC). The results of the study found that a large number of economists are of the opinion that the BoC will reduce its asset purchase program due to the strengthening economic recovery and continued growth this year.
Despite a recent ‘lockdown’ in some provinces and expectations that the economy will continue to grow slowly this quarter, policymakers remain expecting a recovery that will be driven by vaccine launches and rising oil prices.
The consensus from the survey is that the BoC will keep its key interest rate at 0.25% until the end of next year, unchanged from the previous survey. 70% or 15 of the 21 economists think that the central bank will reduce its asset purchase program as a next step.
Although the Canadian economy contracted 5.4% per year in 2020, the Canadian economy still recorded a surge of 9.6% in the fourth quarter. According to the Canadian Department of Statistics, the economy is likely to rise 0.5% in January despite the second wave of infection and movement control tightening measures.
However, 25 economists agreed with the BoC’s assessment that the economy will be strong and sustainable in the second half of this year
