Article content

One of the biggest bears on Canada’s economy restated his view Friday that the Bank of Canada will slash its benchmark interest rate two more times by the end of the year.

“Although there is limited scope to reduce interest rates further, the hit from lower oil prices on the economy is taking a heavier toll than widely acknowledged,”said David Madani, Canada economist with Capital Economics. “Without any offset from the non-energy economy, we see no reason why the Bank wouldn’t take out more insurance by lowering rates from 0.75% to 0.25% before year end.”

We apologize, but this video has failed to load.

tap here to see other videos from our team. Try refreshing your browser, or The most bearish call on Bay Street: Bank of Canada will slash to 0.25% by year end Back to video

Among economists surveyed by Bloomberg, Madani currently has the most bearish forecast. The bank already cut its interest rate once this year, with a surprise reduction from one per cent to 0.75 per cent in January.

The median call among economists is that the bank will leave its rate unchanged by the end of the year, with about a third of economists seeing one more cut to 0.50 per cent. Madani is the only economist surveyed by Bloomberg to call for a cut to 0.25 per cent.