OTTAWA — Bank of Canada governor Stephen Poloz says he has not ruled out a future cut to interest rates despite his belief that the global and Canadian recoveries are picking up steam and that disinflationary pressures appear to be waning.The head of Canada’s central bank made the comment after it decided to keep the trendsetting overnight rate at 1% for the 29th time in a row since September 2010.The bank also pared back its estimate for first-quarter economic growth by a full point to 1.5% — mostly because of the severe winter weather that began in December — and 2014 growth to 2.3% from 2.5.But in its overall assessment, the Bank of Canada’s new monetary policy report appeared to reflect a growing confidence in the global economic recovery and less concern about persistent low inflation and an overly hot housing sector.Still, Poloz said in a teleconference from Toronto — where he was to attend former finance minister Jim Flaherty’s funeral in the afternoon — that considerable risks remain, including the possibility that Canadian exports won’t recover fully and the potential for a political shock from Ukraine’s difficulties with Russia.“We are neutral, that means a rate cut cannot be taken off the table at this stage,” Poloz said. “It will depend on the data.”The central bank has set an ideal target of annual inflation at 2.0% but considers it acceptable within a range of between 1.0% and 3.0%.Most economists are pencilling in a rate increase in the summer or fall of 2015, but say the chances of an actual cut from an already low setting are receding with each month of positive economic data, including more normal levels of inflation. The last reading was 1.5% and analysts are expecting the consumer price index will rise to 1.6% for the month of March in Thursday’s report from Statistics Canada.Poloz went to great lengths on Wednesday to say that inflation remains weak — despite expectations it will approach the desired 2% target within the next few months. He said the near-term return of inflation will be due to temporary factors such as higher energy prices, but underlying inflation likely won’t likely return to the target rate until 2016. Still, the bank’s new outlook as outlined in the monetary policy report suggests Poloz and his deputy governors are becoming a little more convinced in the growth story.The first-quarter slowdown is already looking like old news and the bank expects the second quarter to pick up to 2.5% growth, and the economy to average 2.5% annual growth in 2015 as a whole.While essentially similar to January’s report, the new monetary policy report sounds a little less concerned about disinflation, or too-high house prices and excessive household debt. The bank governors also seem more confident in the sustainability of the recovery, and that stronger U.S. demand and the lower Canadian dollar will start to benefit exporters, particularly manufacturers.The most encouraging aspect of the report is what the bank’s governing council sees happening to exports, which remain about 5% below pre-recession levels and are considered the economy’s weak link. The weak exports not only keep factories operating under capacity, muting job creation and salary growth, but also keeps businesses on the sidelines in terms of investing in improvements that would increase productivity.Rising energy prices mean oil and gas exporters will do even better than previously expected, the bank says. But it is also encouraged that manufacturers will soon see a lift, particularly now that the Canadian dollar has lost about 10% of its previous value since February 2013. The dollar traded at about 90.7 cents US at midday Wednesday, down about one-third of a cent from the previous close.“Canada’s non-energy range of export sectors are expected to benefit, including those linked to the U.S. construction activity, such as logging and building materials,” the bank says. “As U.S. investment in machinery and equipment strengthens, export sectors, such as industrial, electrical and electronic machinery and equipment, computers, and aircraft, should strengthen.”Still, competitive pressures will keep those benefits below the levels one would have expected given the higher demand from the U.S., the report cautions.“Obviously our story hinges critically on the export outlook,” said Poloz. “We obviously have what looks like a soft landing emerging in housing, so it’s critical we get a pick up of momentum in exports which will then be followed by a pick-up of investment. And those two shifts will give us sustainable growth trend.”Poloz said all the ingredients were there for an export sector recovery, but was reluctant to count his chickens yet, noting that those ingredients have been “present for quite a while and we have not seen a response yet.”The bank says it is still concerned about a downward shift in inflation, but for the present it expects the headline consumer price index will gravitate close to the 2.0% target in the upcoming few months, although that is mostly due to the lower loonie and the effects of higher energy prices.However, it says core, or underlying, inflation won’t return to target until 2016 because of slack in the economy and growing competitiveness among retailers. If the bank is right about the analysis, it suggests interest rates won’t be raised until sometime in 2016.After highlighting the dangers of high consumer debt and frothy house prices through most of 2012 and 2013, the bank says that, while the danger has not fully passed, it is less worried about a severe correction that would sideswipe the economy.“Recent developments are in line with the bank’s expectation of a soft landing in the housing market and stabilizing debt-to-income ratios for households,” it judges.In a separate section on the likely impact of the ballooning shale oil extraction activity in the United States, the bank said the increased supply may depress crude prices somewhat but won’t significantly deter Canada’s oil sands production.“Since shale oil is often as expensive to produce as oil from the Canadian oil sands, only the most marginal and costly Canadian projects would be affected,” it says.