Globally, the economic outlook remains highly dependent on the course of the virus and new variants are a concern. In Canada, we still have some way to go to a complete recovery, and the rebound in economic activity will proceed at different speeds across sectors. The process of reopening the economy won’t be entirely smooth.
For example, we are experiencing supply bottlenecks for some goods and services as demand rebounds faster than supply can ramp back up. These unique circumstances of the pandemic are now helping to push inflation temporarily above our target band.