The world is now grappling with three major shocks, which have had important effects on the Canadian economy. The U.S. economy is undergoing its first consumer-led slowdown in almost two decades. Global financial turbulence is increasing the cost of capital and decreasing its availability.
Finally, commodities have been in a supercycle, with the prices of agricultural commodities nearly doubling, base and precious metals nearly tripling and energy products more than quadrupling since 2002. In the face of these developments, global inflationary pressures have risen even as the global economy has begun to slow. I would like to address each of the three in more detail.