The Bank of Canada is scheduled to announce its next interest rate decision on Wednesday, accompanied by updated economic forecasts for growth and inflation in the quarterly Monetary Policy Report.

Bank of Canada is expected to keep the key interest rate steady this week as inflation continues to slow, despite other data indicating that the economy is still growing fast but unsustainably.

Douglas Porter, Chief Economist at Bank of Canada, said that although the economy is growing faster than expected, the lower inflation will likely convince Bank of Canada to keep the key interest rate at 4.5 percent.

Porter also added: "When we put all these things together, it certainly looks like the bank (central bank) is likely to keep interest rates steady for now."

For months, the economic data relied upon by Bank of Canada in its interest rate decisions has sent mixed signals about the state of the economy.

So far this year, growth and employment figures have come in stronger than expected, even with Bank of Canada's key interest rate at its highest level since 2007.

After the slight contraction in December, real GDP grew by 0.5 percent in January, and preliminary estimates from Statistics Canada indicate that the economy grew again in February by 0.3 percent.

Also, Karyne Charbonneau, Executive Director of Economics at CIBC, said that a close look at the economic growth figures shows there may not be much cause for concern.

The impact of higher interest rates on slowing economic expansion and growth is expected to continue.

Recent surveys conducted by Bank of Canada also show that consumers and businesses are preparing for an economic slowdown; consumers reported plans to cut back on travel and restaurants to save money, and meanwhile, businesses expect their sales to decline.

Although labor shortage was still a major concern for businesses, the survey found signs of easing in both the labor market and wage growth.

Charbonneau said: "The survey results show that raising interest rates is paying off, and I think all of this is encouraging."