bring inflation down are making things difficult for many canadians. and slow growth doesn't feel great. but the alternative - years and years of high inflation and then a deep recession - is much worse. when we get through this period of slow growth and inflation is back to the 2 % target, canadians will once again be able to budget and invest with confidence, prices will be stable and predictable, and the economy will work better for everyone. conclusion it's time for me to conclude. the past two years have been a painful reminder of how much high inflation hurts households, businesses and communities. it's our common enemy - not only because it creates financial pain and social upheaval, but also because no one wins when inflation is high and volatile. we all want to see high inflation defeated. the lesson from the 1970s is that fighting inflation half - heartedly and living with the stress, labour strife and uncertainty inflation can cause would be a huge mistake. the right way to respond is with a firm commitment to restoring price stability. but we don't want to avoid one mistake only to overdo it on the other side. we are trying to balance the risk of over - and under - tightening. if we do too much, we risk making economic conditions unnecessarily painful for everyone. if we do too little, canadians will continue to endure the harm of inflation and we will likely have to raise interest rates even higher later. to return to low inflation and stable growth in the years ahead, we need these higher interest rates and slow growth in the short term. our inflation target, our track record and our forceful response will get us through to the other side. we're well on our way, and we need to stay the course. thank you. i would like to thank daniel de munnik and brigitte desroches for their help in preparing this speech. 1 bank for international settlements, annual economic report 2022 ( june 2022 ). 5 / 5 bis - central bankers'speeches

impact on the energy sector. we projected that growth would then pick up, starting in the second quarter. as it turned out, the slowdown in the fourth quarter was sharper and more broad - based than we expected. this came despite strong growth in employment and labour income. while the anticipated slowdown from the energy sector was fairly aligned with our projections, other categories surprised. as such, and given that the data present a mixed picture, i ’ m going to spend a bit more time on the national accounts numbers we received last week. let me walk through the main economic categories, starting with business investment. for 2018 as a whole, investment grew by 2 per cent, which was less than we had expected. this reflected weakness in both the third and fourth quarters. so what might explain this? while many companies were relieved to see the successful negotiations to replace nafta with the canadaunited states - mexico agreement, they continue to wait for the deal to be ratified. it ’ s possible that some companies are delaying investments amid the uncertainty. and, of course, the uncertainty isn ’ t limited just to the new nafta — global concerns, particularly on the us – china trade front, are clearly hurting confidence and leading firms to delay investment decisions. another possible explanation for the weakness in investment is timing. the accelerated depreciation tax changes announced late last year by the federal government are welcome news for corporations, and it ’ s possible that in anticipation of the changes, investment decisions were postponed. if so, we should begin to see a pickup in the first quarter of this year, which would be consistent with recent quarterly readings from our business outlook survey. we will have an updated survey to further inform our april decision. next up is exports, where the profile was also weaker than expected. one bright spot in exports was services, which grew by more than 6 per cent in the quarter, led by commercial and travel services. i ’ ve already talked a fair bit about housing, and the biggest negative surprise in that category during the fourth quarter came from renovations. as i noted before, there are significant adjustments occurring in housing markets, and it will take time for these adjustments to be completed. nevertheless, the national rate of mortgage credit growth increased slightly, also in the fourth quarter, and we ’ ll see what happens with sales once spring rolls around. and i ’ ll end on the topic of my speech today — consumer spending. it, too, was lower than we expected in