The Bank of Canada's annual economic growth forecast is overly optimistic, economists said, and another large interest rate cut this year will likely be required to boost growth. Economists widely expected the BoC to lower its annual gross domestic product (GDP) forecast when it released its quarterly monetary policy report on Wednesday,

The central bank says bigger step possible with inflation returning to 2% target and forecast to stay there through 2026.

The Bank of Canada has cut interest rates by half a percentage point to 3.75 per cent, in a bid to spur consumer spending and boost growth. The central bank’s move comes after Canada’s inflation fell below its 2 per cent goal,