BoC's Poloz: Global economy looks set for continued slow growth

The global economy looks set for continued slow growth thanks to structural reasons and low interest rates are likely to persist as well, Bank of Canada Governor Stephen Poloz argued in his prepared remarks delivered before the Empire Club of Canada in Toronto on Thursday. 

Poloz refrained from commenting on the near-term policy outlook and the USD/CAD pair was last seen trading at 1.3175, adding only 0.04% on the day. 

Key quotes

"Rates are likely to fluctuate around historically low levels, cites structural factors such as slowing population growth and risks to productivity growth."

"One consequence of persistently low rates is that household indebtedness may continue to rise; household indebtedness is Canada's most important financial vulnerability."

"It is highly uncertain how combination of low rates, rising debt and technological change will hit households, companies and governments."

"Although risk of surprise outbreak in global inflation is low, mix of high household and government debt as well as populist politics holds inflationary potential for some nations."

"Perhaps recent tendency for inflation to run below target in many countries has fostered degree of complacency."

"More likely, inflation risk is being overwhelmed by deep structural forces limiting economic growth, keeping even long-term rates low."

"High levels of financial vulnerabilities could make it harder to hit inflation target, bank will continue to embed financial stability linkages in monetary policy framework."

"We are studying whether it makes sense to issue digital version of our bank notes."

"So far we have not seen signs of higher productivity in economic data caused by new technologies, possibly because this is hard to capture."