Monetary Policy Report Update - July 2002

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At the time of the April Monetary Policy Report, it was evident that a robust economic recovery was underway in Canada. The Bank therefore began to reduce the substantial amount of monetary stimulus in the economy.

In the past three months, the Canadian economy has continued to register strong growth. Spending on housing and consumer durables has been much stronger than expected. Business fixed investment no longer appears to be acting as a drag on growth, with signs of recovery in investment in machinery and equipment emerging. Among Canada’s major trading partners, economic growth has been broadly in line with expectations.