The Canadian currency could fall to a record low of $1,187.77 by the time of the 2019 budget, a move that could further crimp Canada’s economy, according to a new analysis.

The Bank of Canada forecasts that the central bank will keep its key interest rate at 0.5 per cent through 2019 and expects the unemployment rate to be near 5 per cent.

“The economy will probably be a little bit stronger in 2019 than it is now, and that’s probably a good thing,” said Mark Stedman, senior economist at TD Securities Inc. in Toronto.

“That means that the economy has some room for recovery, even if we have a lower interest rate.”

For the first time in three years, Canada is expected to miss its fiscal goal of $10-billion in revenue from oil and gas revenue by the March 31, 2019, due to the impact of the oil price slump, the bank said in a report.

The fall would bring the central banks deficit to $7.6-billion, the lowest since 2008.

That would be a 10-per-cent decline from the $10.5-billion deficit for the same period last year, the most recent year for which figures are available.

“This is going to have a real impact on the economy, but we don’t know yet what the impact is going in terms of the tax side,” said Stedmans co-author, David Madani, an economist at the University of Ottawa.

The country is on track to meet its fiscal year 2018 target of $15-billion from oil revenues and $9-billion for the rest of the year, but it’s not clear when the federal government will be able to pay off its debt and pay back the oil revenue.

The Canadian economy is expected be strong for the second straight year, with the unemployment number down to 4.9 per cent and the economy growing faster than most developed nations.

It has posted growth of 3.3 per cent in the first quarter of the fiscal year, compared with 3.1 per cent a year ago.

The government expects the economy will grow at a 1.4 per cent annualized rate through 2019.

“Canada is on a very, very strong track,” said Madani.

“It’s still early days, but the government is going into the year very optimistic about its economic future.”

With files from the Associated Press and Reuters