The Globe and Mail reports in its Thursday edition that Canada's economy is humming along surprisingly well, a situation that will influence the Bank of Canada's policy decision on interest rates in two weeks. The Globe's David Parkinson writes that three weeks ago, BOC Governor Stephen Poloz gave a news conference in which he laid out a bleak view of the Canadian economy.
The quarterly Monetary Policy Report that he presented painted a much more pessimistic picture of the first half of the year than most economists expected. Though the bank believed the slump was temporary, the economy was nevertheless slipping further away from its full capacity. More interest-rate hikes were no longer on the table.
When Mr. Poloz heads into Thursday morning's news conference for the bank's annual Financial System Review, he will have a set of recent economic indicators in hand that beams sunshine over the BOC's cloudy view. So much so, in fact, that Mr. Poloz will likely face questions asking him to square the flow of recent positive economic data from Statistics Canada with the BOC's downbeat forecasts. Two short weeks from now, the BOC will offer its best guess on just how good and how sustainable the economy really looks.
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