Monetary Policy Report – November 1997

In the last half-year, the economic expansion in Canada has become well established, supported by low inflation, highly stimulative monetary conditions, and a strong U.S. economy. These positive factors have more than offset the dampening effects that fiscal restraint and private and public sector restructuring have had on spending and consumer confidence.

Private sector activity has been moving ahead briskly, with household spending and business investment in machinery and equipment leading the way. In addition, strong growth in world trade has supported a rising trend in Canadian exports. Consequently, economic slack has been taken up more rapidly than in the second half of last year.