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OTTAWA (Reuters) - Bank of Canada Senior Deputy Governor Paul Jenkins said on Wednesday that more monetary stimulus is likely to be required in the near term to keep aggregate supply and demand in balance.
"In line with the bank's outlook, further monetary stimulus is likely to be required in the near term," he said in the prepared text of a speech being given to a House of Commons industry committee.
On January 22, the Bank of Canada cut its key overnight interest rate by 25 basis points to 4.00 percent.
Jenkins repeated the projections included in the bank's latest Monetary Policy Report update, released last week.
The central bank projects economic growth in 2008 will be weaker than was previous expected.
"On an average annual basis, the economy is projected to expand by 1.8 percent in 2008 and 2.8 percent in 2009," he said.
"Both core and total CPI inflation are projected to fall below 1.5 percent by the middle of this year before returning to 2 percent by the end of 2009."
Reporting by Randall Palmer and Louise Egan; Writing by Renato Andrade; Editing by Rob Wilson