Six months later, we have seen some very positive developments. The Canadian economy has solid momentum and continues to operate near its capacity. Growth is relatively broad-based across sectors and regions and it is more balanced, as the composition of demand shifts toward business investment and exports and away from consumption and housing.
The economy will grow at a rate slightly above its potential over the projection horizon, supported by both foreign and domestic demand and favourable financial conditions. Meanwhile, inflation is close to target after running a little higher than we expected in July and August due in large part to changes in the way Statistics Canada measures airfares.