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Bank of Canada Governor Stephen Poloz may cut his current forecast of 2.2 per cent growth for 2017, now above the consensus of 1.9 per cent.Sean Kilpatrick/The Canadian Press

The Bank of Canada will probably officially pare back its economic outlook at an interest-rate decision Wednesday and say lingering damage from an oil slump is weighing on exports.

Governor Stephen Poloz may cut his current forecast of 2.2 per cent growth for 2017, now above the consensus of 1.9 per cent, and some analysts say he will push back his prediction for the economy to reach full output next year. The bank's key interest rate will remain at 0.5 per cent, according to all 25 economists surveyed by Bloomberg in a decision due at 10 a.m. eastern time.

The Bank of Canada shifted gears on its economic outlook last month, saying inflation risks had tilted to the downside since July and exports have lost ground. The change may pave the way for further rate cuts if necessary.

"While a rate cut this month is unlikely in our view, should incoming data beyond October confirm further deterioration in growth conditions, particularly in non-energy exports and U.S. growth, the risk of additional policy easing will grow considerably," Brittany Baumann, a macro strategist at TD Securities in Toronto, wrote in a note to investors.

"They are seeing greater uncertainty with regards to external demand and future business investment and that's what scares them at this point," she said in a phone interview.

Mr. Poloz and senior deputy governor Carolyn Wilkins both said in recent speeches that they're unconvinced by the latest positive indicators. Exports gained for a third consecutive month, gross domestic product expanded 0.5 per cent, exceeding forecasts and the country added the most jobs in more than four years, monthly data show.

"There's no doubt they will stay cautious" in Wednesday's decision, Benjamin Reitzes, a senior economist at BMO Capital Markets, said by phone from Toronto. "They still aren't satisfied" with export growth.

The bank predicted in July the economy would return to full output toward the end of next year; however, that will likely be pushed back into 2018, according to Jimmy Jean, a strategist in the fixed-income group at Desjardins Capital Markets in Montreal. "The Bank of Canada has been clear we are going to be in a period of low growth for quite some time," he said.

Mr. Poloz may have more leeway to cut rates after Finance Minister Bill Morneau set tougher mortgage rules on Oct. 3 in an effort to mitigate risks in the housing market. The measures include a more stringent stress test for home buyers and stricter eligibility criteria for insured loans.

"They would like to see those ease further," Ms. Baumann said, referring to household imbalances. A slowdown would give policy makers more room to cut, if needed, she said.

If Mr. Poloz cuts his growth forecast below 2 per cent for next year, it suggests the economy won't grow quickly enough to eat into slack that has kept inflation within 2 per cent for almost two years.

"It is quite evident that our economy is still facing strong headwinds, and we need stimulative monetary policy to counteract them and move us closer to full capacity," Mr. Poloz said in a Sept. 20 speech in Quebec City. He added an upbeat note in Washington on Oct. 11, telling reporters the situation "continues to be okay."

Okay is good enough for investors betting it means little chance of a rate move. Swaps trading shows just 4 per cent odds of a cut by December, and only 15 per cent by July, 2017.