We are being conservative by assuming that exports only make up part of the ground lost over the past four months. The past depreciation of the exchange rate will continue to support the level of exports, but its effect on export growth is projected to taper off over the course of this year.
Growing demand for Canadian exports should lead to increased investment and new businesses being created. The question for monetary policy is when and by how much. Governing Council still believes that investment will be needed to expand productive capacity as both foreign and domestic demand increase.