Source: Sharecast
"We are closely monitoring the impact of the conflict in the Middle East and how the economy is responding to US tariffs and trade policy uncertainty," the Bank said in a statement.
"Governing Council is looking through the war’s immediate impact on inflation but will not let higher energy prices become persistent inflation. As the outlook evolves, we stand ready to respond as needed."
The BOC said it expects GDP growth of 1.2% this year, rising to 1.6% in 2027 and 1.7% in 2028 as growth in exports and business investment resumes along a lower trajectory.
The Bank also said consumer price inflation will likely rise further in April to about 3% from 2.4% in March. This is based on the assumption that oil prices will ease, with inflation forecast to come down to the 2% target early next year and remain around 2% over the projection horizon.