"Canada's economic recovery is expected to evolve largely as anticipated in the October (policy report), with the economy returning to full capacity and inflation to the 2 percent target in the third quarter of 2011," the bank said in its statement. "The bank projects that the economy will grow by 2.9 percent in 2010 and 3.5 percent in 2011, after contracting by 2.5 percent in 2009."
The bank noted there has been stronger-than-projected global and domestic demand, although the "persistent strength of the Canadian dollar ... could act as a significant further drag on growth and put additional downward pressure on inflation."
The quarter-percent rate is the lowest in Canadian history and will reassessed by the central bank March 2.
Copyright 2010 by United Press International.
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