6.7 per cent, and remain at about 5.1 per cent, as a result of weaker exports.
Against such a background, the Governor of the Bank of Canada, Tiff Macklem, called on forecasters and investors to remain calm, insisting that nothing much had changed over the past few weeks. Delivering his final public remarks before the central bank’s next interest-rate announcement later this month, he pointed out that the recent upward pressure on pricing has been a result of “unique circumstances” related to the pandemic and therefore price spikes still look transitory.
Previously, Macklem told reporters that while these unprecedented circumstances have persisted longer than anticipated, they are expected to recede over time. He pointed to the surge in lumber prices as an example, which were caused by an extreme mismatch between demand and supply, but soon declined as sawmills began to increase their supply.
According to the BoC Governor, demand which was unmet during the summer signals demand which can be met as supply catches up. He cited the example of the global computer-chip shortage which has caused an unusually slow supply in vehicles. Macklem noted that automakers will replenish those fleets as soon as the shortage is tackled.
“The track for GDP growth is probably a little bit slower than what we put out in July, but we do continue to expect a good rebound,” he said.
