OTTAWA, July 15 (Xinhua) -- The Bank of Canada announced on Wednesday that it will maintain its benchmark interest rate at 2.25 percent.
Bank of Canada Governor Tiff Macklem said at a press conference that Canada's economic growth appears to have resumed after stalling over the past year. Despite headwinds from U.S. trade policy, Canadian consumers have been resilient and businesses are adapting, he said.
Macklem said that Canada's inflation rate rose to 3.2 percent in May, mainly driven by higher gasoline prices linked to the Middle East conflict. Excluding gasoline, the inflation rate was 2.2 percent, with core inflation measures remaining close to 2 percent. However, he warned of a risk that inflation could get stuck above the 2 percent target if oil prices remain elevated for a prolonged period.
According to the central bank's latest Monetary Policy Report released Wednesday, Canada's GDP growth is projected to rise from 0.7 percent this year to 1.8 percent in both 2027 and 2028. Inflation is expected to ease gradually in the coming months and return to the 2 percent target in early 2027.
