A quarterly report of the Bank of Canada’s Governing Council, presenting the Bank’s base-case projection for inflation and growth in the Canadian economy, and its assessment of risks.
Three major interrelated global developments are having a profound impact on the Canadian economy and making the outlook more uncertain than it was at the time of the July Monetary Policy Report Update.
Three major developments are affecting the Canadian economy: the protracted weakness in the U.S. economy; ongoing turbulence in global financial markets; and sharp increases in the prices of certain commodities — particularly energy. The first two developments are evolving roughly in line with expectations outlined in the April Monetary Policy Report.
Growth in the global economy began to slow in the fourth quarter of 2007 and the first quarter of 2008. This reflected the effects of the slowdown in the U.S. economy and ongoing dislocations in global financial markets.
The Canadian economy grew broadly in line with the Bank’s expectations in the second half of 2007.
