Bank of Canada Summary of Deliberations: Global growth has slowed, but less than projected

The Bank of Canada's (BoC) latest Summary of Deliberations highlighted global economic headwinds, noting that surprisingly resilient consumer spending in the US is helping to smooth over downside risks.

The BoC remains concerned that the Canadian economy stalled out in the latter half of 2023, while inflation appears set to remain above 2% until sometime in 2025.

Key takeaways

Global growth had slowed, but not by as much as projected in the October Monetary Policy Report, mainly because of stronger-than-expected growth in the United States. 

Canada’s economic growth had stalled since the middle of 2023. However, they expressed concern that unless productivity growth was exceptionally strong, wage growth in this range could hold inflation up.

Overall, Governing Council expected economic growth to remain weak in the first half of 2024 before picking up in the second half. Inflation was expected to remain around 3% for the first half of the year before gradually easing and reaching the 2% target in 2025.

With inflation still too high and too broad-based, members wanted to be clear in their communications that they were still concerned about the persistence of underlying inflation.