Inflation is ‘increasingly’ self-sustaining, says Bank of Canada governor


The liberal government has called inflation a “global phenomenon”, but Canada’s central bank governor has said it is “increasingly” a problem for Canada.

Bank of Canada Governor Tiff Mackrem told the Halifax Chamber of Commerce, “Some of this inflation reflects global developments beyond our control, but Canadian inflation is happening in Canada. It reflects that,” he said. Speech on October 6th.

“The demand for goods and services here at home is outstripping the economy’s ability to supply them.”

Macklem said the pandemic lockdown had pushed inflation below zero, prolonging deflation was a “genuine concern” and banks had provided “exceptional financial support”.

This, combined with “exceptional fiscal stimulus,” avoided a deeper recession and delivered “the fastest recovery in history,” he said.

Macklem said businesses are having trouble finding enough workers, and rising prices due to international supply chain problems are now spreading across many services.

“All the signs today point to the economy clearly in excess demand,” he said.

The Conservative Party and its leader Pierre Polivre Steadily say it Governments and central banks are largely responsible for inflation through deficit spending and the creation of new currencies.

Liberals, on the other hand, have regularly identified inflation as a “global phenomenon” caused by the pandemic and Russia’s aggression against Ukraine in dealing with the issue.

“We cannot compensate all Canadians for the rising costs caused by the pandemic and Putin’s invasion of Ukraine,” said Finance Minister Chrystia Freeland. Said House Finance Committee on Oct. 3.

“We know how much Canadians are suffering from a global phenomenon, inflation.” Said Prime Minister Justin Trudeau in the House of Commons on Oct. 5.

Despite calling it a “global phenomenon,” liberal governments are wary of proposed measures to ease inflation, recognizing that government spending could make matters worse. also said.

“And just as Canadians cut costs, so will our government. We’ll do our part to not add fuel to the fire,” Freeland said. said before the committee.

Canadian inflation, measured by the Consumer Price Index, which calculates the price of a basket of commodities, was 7% in August, down from 7.6 the previous month.

Not all developed countries are going through tough times. inflationthe latest reading for Japan is 3% and Switzerland 3.3%, but many do.

Inflation in the Netherlands was 14.5% in September, up 2.5% from the previous month. While rising energy prices have had an impact, data The eurozone money supply is also showing a steady increase.

the bank of canada reduce The amount of stimulus in the Canadian economy quantitative tightening From early spring.

Its opposite, quantitative easing, was used by central banks to strengthen the economy by buying government bonds and securities from financial institutions to keep interest rates low and encourage lending.

The Bank of Canada’s next interest rate announcement is scheduled for October 26th. Since March, it has steadily raised interest rates to keep inflation down, from 0.25% he’s now to 3.25% he.

Noe Chartier

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Noé Chartier is a reporter for the Epoch Times based in Montreal. Twitter: @NChartierET Gettr: @nchartieret