Headline: Canada's New Immigration Targets Could Influence the Bank of Canada's Growth Forecast

Bank of Canada Governor Tiff Macklem stated today that the new immigration reduction targets set by Canada earlier this week could significantly impact the country's economic growth forecasts. Macklem emphasized that these changes are more likely to affect growth projections rather than the inflation outlook.

In assessing the potential impacts of immigration policy adjustments, Macklem acknowledged significant uncertainty regarding how quickly these immigration restrictions will be implemented. The Bank of Canada is in the process of evaluating the effects of the new figures to fully understand their implications.

Macklem also noted that if population growth slows more rapidly than the bank's current assumptions, the overall GDP growth may fall short of expectations. Conversely, if household spending rebounds more quickly, partly due to the central bank's ongoing efforts to reduce borrowing costs, this could lead to higher economic growth.

The Governor's comments followed the Bank of Canada's decision to cut the key interest rate on October 23, 2024, aiming to guide the country's economic trajectory. As Canada implements these new immigration targets, the Bank of Canada will closely monitor the situation to adjust economic forecasts accordingly.