Canada's Economy Shows Signs of Renewed Momentum Amid Inflation Concerns

Canada's economy is showing signs of renewed momentum, but the recovery is far from straightforward. Growth has resumed, employment improved and interest rates have stabilized.

Inflation remains a concern, however, with Canada's Consumer Price Index rising 3.0% year over year in July, following a 2.8% increase in June. Transportation prices were up 7.8%, while food purchased from stores increased by 3.1%. The Bank of Canada maintained its policy rate at 2.25% in July, where it has remained since the beginning of the year.

The central bank expects inflation to ease gradually, provided global oil prices move lower and broader price pressures remain contained.