The Bank noted today that domestic economic growth in the first quarter, at 2.2%, was slightly stronger than forecast. However, the labour market has weakened, and unemployment has risen to 6.9%. The economy is also expected to be considerably weaker in the second quarter, the Bank warned.
On the inflation front, headline inflation eased to 1.7% in April, due to the elimination of the federal consumer carbon tax. Excluding taxes, inflation rose 2.3% in April, slightly stronger than the Bank had expected. The Bank’s preferred measures of core inflation, as well as other measures of underlying inflation, also moved up, it said.
Recent surveys indicate that households continue to expect that tariffs will raise prices, and many businesses say they intend to pass on the costs of higher tariffs, the Bank said.
“With uncertainty about US tariffs still high, the Canadian economy softer but not sharply weaker, and some unexpected firmness in recent inflation data, (the Bank) decided to hold the policy rate as we gain more information on US trade policy and its impacts.
“We will continue to assess the timing and strength of both the downward pressures on inflation from a weaker economy and the upward pressures on inflation from higher costs.”
Lower interest rates would certainly be welcomed by Canadian farmers. A Statistics Canada farm income report released last week estimated nationwide farm debt at the end of 2024 at $166.7 billion, up 14.1% from a year earlier and largest annual increase since 1981 when it jumped almost 15% to $18.3 billion.
Source : Syngenta.ca