We last heard from Macklem in the BOC decision last Wednesday.
Here are his latest comments:
Restructuring of the Canadian economy and pick-up in productivity will take years
Transition to new economy could be more painful than we'd like
Canada needs to lean into structural change to avoid worst-case scenario
It is hard to differentiate structural change from cyclical fluctuations; we must be careful not to misdiagnose economic weakness
Bank of Canada is not expecting unemployment rate to trend higher, given how little growth there is in the labor force
Lowering rates in face of weak economy could stoke inflation if the weakness is due to lower productive capacity rather than a cyclical downturn in demand
We should see some gradual improvement in labor market in the period ending 2027
Rise of AI has potential to put economy on higher path and raise standard of living; so far there is little evidence AI is improving productivity
He paints a tough picture but includes an optimistic note on unemployment given changes in immigration.
