Monetary Policy Report

Information received since the last Monetary Policy Report continues to show solid economic growth in the United States, Europe, and the emerging markets.

The global economy has shown greater strength than was anticipated at the time of the November Report.

Information received since the last Monetary Policy Report, released on 17 November, points to a stronger pace of economic expansion in the United States and Europe than was expected at that time, and confirms the hesitant nature of the recovery in Japan.

Since the May Report, the international economic environment has continued to improve. Economic activity abroad grew faster than expected, while inflation in the major economies remained subdued.

Six months ago, at the time of the last Monetary Policy Report, the global economic and financial environment was volatile and highly uncertain because of the adverse situation in Asia and the fallout from the Russian debt moratorium.

During the past six months, global economic uncertainties have intensified, largely as a result of developments in emerging-market economies.

Canada’s inflation-control targets establish a specific medium-term objective for monetary policy.

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.

Since the last Report, the Canadian economy has advanced broadly in line with expectations.

This Report outlines recent developments in the Canadian economy that affect the rate of inflation and provides an account of the measures taken by the Bank of Canada to control inflation.