The Bank of Canada kept its main interest rate at 1 percent while saying that an increase remains possible, adding that the domestic recovery will be slowed by weaker global demand for exports.
The worldâ€™s 10th largest economy wonâ€™t reach full output until the second half of next year, compared with an April prediction for the first half of 2013, the Ottawa-based central bank said. The decision was forecast by all 24 economists surveyed by Bloomberg News.
â€œWhile global headwinds are restraining Canadian economic activity, domestic factors are expected to support moderate growth,â€ policy makers led by Governor Mark Carney, 47, said in a statement. â€œSome modest withdrawal of the present considerable monetary policy stimulus may become appropriate.â€
Housing and employment gains are being offset by the drag from a merchandise-trade deficit and reduced confidence stemming from Europeâ€™s debt crisis. The U.S. Federal Reserve and the Bank of England expanded programs to buy assets in the last month, while the Peopleâ€™s Bank of China and the European Central Bank cut their main interest rates.