- The profile for global economic growth has improved since January. Europe is anticipated to emerge slowly from recession in the second half of 2012 while U.S. economy is recovering more resiliently on improved labor markets, financial conditions and confidence. Besides, economic activity in emerging countries is expected to moderate to a still-robust pace.
- Economic momentum in Canada is slightly firmer than the Bank had expected. Business and household confidence are improving faster than forecast in January. Business investment is projected to remain robust, reflecting solid balance sheets, very favorable credit conditions and continuing strong terms of trade and heightened competitiveness pressures. In contrast, the recovery in net exports is likely to remain weak in light of modest external demand, ongoing competitiveness challenges and persistent strength of the Canadian dollar.
- Canadian economy was projected to grow by 2.4 percent in 2012 and 2013 before moderating to 2.2 percent in 2014. The degree of economic slack has been somewhat smaller than the Bank had anticipated in January. The economy is now expected to return to full capacity in the first half of 2013 .
- Due to reduced slack in the economy and higher gasoline prices and stronger momentum in household spending, inflation in Canada is expected to be somewhat firmer than anticipated in January. Total and core inflation are expected to be around 2 percent over the balance of the projection horizon .
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