Economic growth and inflation in Canada in the first half of this year have been stronger than expected in the April Monetary Policy Report. Final domestic demand has remained the key driver of economic growth in Canada, bolstered by firm commodity prices. The Bank judges that the economy is now operating further above its production potential than was projected at the time of the April Report. Both total CPI and core inflation have been higher than projected in April and are above the 2 per cent inflation target.