Bank of Canada Officials Divided Over Sustainability of Economic Growth
The Bank of Canada's governing council was divided over the sustainability of recent economic growth at their July rate decision, minutes from the meeting show.
Despite a rebound in the second quarter, with real GDP growing 2.5% on an annualized basis and modest growth expected through 2027, some members were skeptical about how long this growth would last.
The council noted that higher global oil prices and signs of a recovery in the housing market were supporting growth over the previous three months, as well as surveys of businesses and a recent pickup in exports indicating firms were adapting to tariffs and trade uncertainty from the US.
However, the possibility of new US tariffs was seen as an ongoing risk to growth, and some members agreed that they would need to closely monitor data for signs that growth was broadening as projected. Despite inflation ticking up to 3.2% in May, there were few signs it was spreading beyond gas prices.