Canadians are able to get a fuller picture of the reasons why the Bank of Canada opted to hold its benchmark rate on Wednesday, with the release of its Monetary Policy Report (MPR).

Here are 10 important takeaways from the report:

  1. After a rebound in the jobs market and a stronger-than-expected economy, the bank said economic slack has been absorbed faster than expected. It also said that while the Omicron COVID-19 variant slowed the economy in the first quarter of the year, it expects the impact to be less severe than previous waves.
  2. Housing is expected to be a drag on Canadian GDP growth this year. The bank sees the real estate sector shaving 0.7 percentage points off annual GDP in 2022, a slightly larger drag compared to the October projection. The reasons the bank cited are waning pandemic-induced demand, a reduction in accumulated household savings, and higher borrowing rates.
  3. The bank expects inflation to peak globally within the first quarter. In Canada, it expects inflation to remain near five per cent in the first half of this year as supply chain problems coincide with rising commodity and food prices, before falling to about three per cent by the end of the year. Overall, the bank sees consumer prices rising 4.2 per cent on an annualized basis this year - up 0.80 of a percentage point from its October forecast. Inflation is expected to moderate to 2.3 per cent in 2023.
  4. Supply shortages are expected to ease by the end of this year but have so far had a more widespread negative impact on the economy than originally thought.
  5. The bank trimmed its Canadian GDP forecasts for 2022 and 2023 by 0.3 of a percentage point and 0.2 of a percentage point, respectively, due to Omicron-related restrictions, supply chain disruptions, a slight downward revision for exports and evidence that government spending is being scaled back quicker than expected. However, it still sees growth of four per cent in 2022 and 3.5 per cent in 2023.
  6. Wage growth has picked up, allowing more workers to more easily find better-paying jobs, which should boost productivity, according to the MPR.
  7. Food prices are expected to be higher for longer because of rising animal feed costs, bottlenecks in the food processing supply chain, and higher energy costs. Side note: the food that has seen the biggest jump in price is bacon, at 19 per cent.
  8. The bank sees foreign demand underpinning strong export growth this year and a long-awaited rebound in business investment in the wake of that increase in exports.
  9. Strong job gains should support the consumption-led economic recovery, according to the bank.
  10. The bank’s forecasts remain based on the assumption West Texas Intermediate crude will trade around US$75 per barrel, and Canadian crude will hover around US$65 per barrel.