Achi news desk-
Bank of Canada Governor Tip McClam says he doesn’t think the federal budget tabled last month will have much of an impact on inflation.
McClam testified before the Senate committee alongside Senior Deputy Governor Carolyn Rogers on Wednesday following the central bank’s latest interest rate announcement.
The governor said the spending plan did not significantly change the federal government’s fiscal trajectory, as it was offset by higher revenues.
“Since the government’s net fiscal plan hasn’t changed much, I don’t think it will have a big impact on our forecasts for the economy or inflation,” McClam said in French.
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Treasury Secretary Chrystia Freeland’s budget pays for new spending with higher taxes and stronger-than-expected government revenues, keeping the federal deficit at bay.
Because of the higher revenues, the budget met all of the government’s promised fiscal safety rails from the fall, which eased into applause.
The Bank of Canada is expected to begin lowering its policy rate in June or July as the economy loses steam and inflation moderates.
McClam noted that the central bank sees the right trends to start lowering interest rates, but he wants to see these trends continue before pulling the trigger.
The Bank of Canada has held interest rates at five percent since last summer.
© 2024 The Canadian Press
