Econ 3077 management of financil institution Coursework - 1

Econ 3077 management of financil institution - Coursework Example Consequently, the effects are manifested in the poor performance of the Canadian dollar. The decline in the oil prices is expected to boost the global economic growth. It is projected that the rate will decrease to US $60 per barrel. In addition to the price decline in the energy sector, there is an increased foreign demand, business assurance and venture, as well as employment rates (Bank of Canada, 2015). However, the weak terms of trade will affect the country’s incomes and wealth by reducing the domestic demand growth. The Bank of Canada projects that the real GDP growth will slow by 1.5% followed by the widening of the output gap in the first half of 2015. The Banks monetary policy, the weaker Canadian dollar and the strong US economy will gradually mitigate the lower oil prices. As a result, the economy will strengthen leading to 2.1 and 2.4 growths in the real GDP in the year 2015 and 2016