The bank of Canada has predicted strong consumption growth in the second half of the year when COVID-19 vaccinations continue, Governor Tiff Macklem said on Tuesday.
In comments to the House of Commons Finance Committee, he reiterated that considerable uncertainty surrounded the central bank's forecast that economic slack should be absorbed in the second half of the year next.
The bank signaled last week that it could start the hike of the rates from their record lows in late 2022, as it lowered its outlook for the Canadian economy and raised the scope of its bond buying programme.
Macklem said the biggest potential causes of uncertainty was how the coronavirus progressed.
This is a bad third wave and we need to get through that as we can get back to more normal activities, we think consumers, Canadians will go spend money and this will lead to the recovery, says he told legislators.
Macklem noted that some sectors had been hit by the pandemic very badly and reiterated that full employment was critical to maintaining the inflation at the 2% target of the Bank.