Given these factors, the Canadian economy could continue to contract into the second half of this year. As noted in our March interest rate decision, the Bank now expects the output gap will be considerably wider than before, and we do not expect it to begin to close until the first quarter of next year, at the earliest.
The Bank will provide a full update of its outlook for the Canadian economy on 23 April when it publishes its Monetary Policy Report. Prospects for recovery: restoring global confidence The timing of the global and Canadian recoveries depends crucially on two related factors: the stabilization of the global financial system and the restoration of confidence among households and businesses.