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By Susan Merivirta, Chief Financial OfficerCorporate News

 

On October 22, 2009, I attended another Monetary Policy Report Briefing by Deputy Governor Timothy Lane of the Bank of Canada.  I consider myself fortunate to be invited to this event which is a private briefing that is closed to the media.  I always find it useful and giving me greater insight into the latest developments in the Canadian economic outlook.

Highlights

1. Recent indicators point to the start of a global economic recovery, although significant fragilities remain.
2. A recovery in economic activity is also under way in Canada, although the current strength in the Canadian dollar is expected, over time, to more than fully offset the favourable developments since July.
3. The Canadian economy is projected to contract by 2.4 per cent this year and to grow by 3.0 per cent in 2010 and 3.3 per cent in 2011.
4. Inflation is expected to return to the 2 per cent target in the third quarter of 2011, one quarter later than was projected in July.
5. The Bank maintained its policy rate at ¼ per cent and reaffirmed its conditional commitment to hold its current policy rate until the end of the second quarter of 2010.

 

One thing that was mentioned that I found critical to Canada’s recovery is that much of the growth being seen in Canada is based on the confidence and spending patterns of individuals.  In fact the statement was made that “global recovery could be even more protracted than projected if self-sustaining growth in private demand, which will be required for a solid recovery, takes longer than expected to materialize.”  Private demand refers to Industry growth and the Bank of Canada is not seeing any self-sustaining growth in this sector yet.