- Stephen Poloz, Bank of Canada Governor
Uncertainties surrounding future global outlook, including geopolitical developments and market volatility, are hampering Canada's growth, Bank of Canada Governor Stephen Poloz said. Nevertheless, the Governor remained upbeat about the future and stressed that interest rates will remain low for the time being, as higher rates would hit automakers and construction and confidence in the broader economy. Poloz also reiterated that interest rates may not return to normal even after the economy returns to full output. Poloz said the BoC remains more worried about too-low inflation even despite the fact that it believes the upside and downside risks are balanced. On top of that, Poloz said that a decline in crude oil prices does not "derail" the central bank's outlook of an economic recovery. Canada still needs sustained increases in exports to boost business investment and return the economy to full capacity, which is when inflation would be able to sustain itself at the 2% target rate, he said, reiterating the process will take about two years.
Another growing threat to economic stability is rising consumer debt levels, which are increasing household imbalances. Despite the concern, Poloz highlighted that those imbalances will ease in the foreseeable future.
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