Forex

Bank of Canada Rolls Out New Forecasting Model to Tackle Inflation Pressures

Guavy AI Editorial Team Published September 23, 2026

Instruments

CAD

Bank of Canada Governor Tiff Macklem unveiled a new forecasting model called Prima to improve the central bank's ability to analyze inflation pressures and economic scenarios. The model will be used for the October interest rate announcement and Monetary Policy Report.

Macklem emphasized that no model is perfect, but this one is better suited for a world with increased supply shocks and interconnection. He noted that growth could be halved in the fourth quarter to below 1% if US tariffs remain in place.

The bank will use Prima to review past episodes and forecast future economic activity. Annual inflation sits at 3%, above the target of 2%. Macklem warned that it could edge up in the coming months if oil prices stay near $100 a barrel, citing damage to global refining capacity.

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