Sources: Statistics Canada and Bank of Canada calculations  10 May 2022  20  30  December 2022 Last observation: December 2022  In summary, recent developments have reinforced our confidence that inflation is coming down. We now expect CPI inflation to fall to around 3% in the middle of this year and reach the 2% target in 2024 (Chart 11).
We’ve already seen a momentum shift in goods prices. For inflation to get back to 2%, supply needs to catch up with demand and services price inflation needs to cool. Wage growth will need to moderate alongside inflation expectations, and pricing behaviour normalize. If those things don’t happen, inflation won’t come back to our 2% target, and additional monetary tightening will be required.