Bank of Canada sees slower growth in 2012

The Bank of Canada expects the economy to grow next year at its weakest pace since 2009, driven by domestic demand, while exports continue to underperform.

The outlook presented by Deputy Governor Jean Boivin in a speech in Thompson, Manitoba, on Thursday reiterated projections the central bank made in its quarterly report on October 26.

The bank sees growth slowing to 1.9 percent next year from an estimated 2.1 percent this year, according to Boivin's slide presentation released to the media.

The bank also sees total consumer price index inflation and core inflation returning to its 2 percent target by the end of 2013, Boivin said.

Domestic demand is projected to be weaker in years ahead, but will remain the primary driver of growth, he added. Exports, on the other hand, have not recovered as quickly from the 2008-09 recession as they did following the 1990-92 and 1981-82 downturns.

The Bank of Canada has held its key interest rate at an ultra-low 1 percent since September of last year, citing the European debt crisis and U.S. weakness.