The Canadian economy was operating even further above its production potential than estimated in July, which was putting upward pressure on inflation. Developments in financial markets had led to some tightening of credit conditions for Canadian borrowers, however, which would temper the growth in domestic demand. And the U.S. economic outlook had also weakened.
Higher returns attracted capital inflows from Western Europe but in light of the crisis, one was tempted to ask whether this source of financing would dry up. This leads me to the question of whether rapid euro adoption is reasonable for CESEE countries.