In our April Monetary Policy Report, we said that the recovery in the Canadian economy began sooner, and was considerably stronger, than anticipated. Consumer spending and residential construction were reflecting the stimulus from both monetary and fiscal policy. Canada’s export volumes had begun to grow once again, as the U.S. economy began to recover.
As you may be aware, the most recent assessment of the Governing Council was that, as the reappraisal of risk in financial markets continues, there remains an unusually high degree of uncertainty over its impact on the real economy.