in the first half of this year, and we expect growth of 1¾ % in the second half. the economy remains in excess supply and the labour market is soft. the unemployment rate was 6. 5 % in september. job layoffs have remained modest but business hiring has been 1 / 2 bis - central bankers'speeches weak, which has particularly affected young people and newcomers to canada. simply put, the number of workers has increased faster than the number of jobs. looking ahead, gdp growth is forecast to gradually strengthen to around 2 % in 2025 and 2¼ % in 2026, supported by lower interest rates. this forecast largely reflects the net effect of a gradual pick up in consumer spending per person and slower population growth. we also expect growth in residential investment to rise as strong demand for housing lifts sales and spending on renovations. business investment is expected to strengthen as demand picks up, and exports should remain strong, supported by robust demand from the united states. the decline in inflation in recent months reflects the combined effects of lower global oil prices, slightly lower shelter price inflation in canada, and lower prices for many consumer goods like cars and clothes. going forward, we can expect to continue to see some monthly fluctuations in inflation. but overall, inflation is expected to remain close to target over the projection horizon as upward pressure from shelter and other services gradually diminishes and excess supply in the economy is absorbed. there are risks around our inflation outlook. the biggest downside risk to inflation is that it could take longer than anticipated for household spending and business investment to pick up. our recent surveys suggest businesses expect subdued sales and their hiring and investment plans are modest. on the upside, lower interest rates could fuel a stronger rebound in housing activity or wage growth could remain high relative to productivity. there is also elevated geopolitical uncertainty and the risk of new shocks. overall, we view the risks around our inflation forecast as reasonably balanced. with inflation back to 2 %, we are now equally concerned about inflation coming in higher or lower than expected. the economy functions well when inflation is around 2 %. let me conclude. high inflation and interest rates have been a heavy burden for canadians. with inflation now back to target and interest rates continuing to come down, families, businesses and communities should feel some relief. the bank is committed to maintaining price stability for canadians by keeping inflation close to the 2 % target. with that summary, the senior deputy governor and i would be pleased to take your questions.

finance. in fact, if anything, a high pace of credit growth may have raised risks of overheating in some sectors, with potential implications for financial stability. the monetary policy committee ( mpc ) has flagged this risk several times since last year, and will continue to monitor the situation closely. on the other hand, there remains an important drag to growth, largely stemming from a protracted global recovery. in some parts of asia, the first quarter growth has turned out to be lower than expected, as a result of slowing global trade. in thailand, q1 growth has similarly been subdued, expanding 5. 3 percent as both private consumption and investment moderated. part of this pullback may have been a natural reversion to a lower pace of growth after an unusually strong expansion last year. lingering uncertainty about global demand bis central bankers ’ speeches may have also caused some export firms to delay planned investment. consumption may have been held back by farm income in the midst of low global commodity prices, and an accumulation of household debt, which is now at 78 percent of gdp. set against this weaker - than - expected domestic demand, is relatively resilient exports which expanded more than 8 percent. given the still weak global demand on the one hand, and already easy financial conditions on the other, monetary policy must carefully weigh the merits of providing growth support against financial stability concerns. policy interest rate is not the only available tool to address these multiple objectives. macroprudential measures, in particular, are also part of the policy tool kit. the mpc will continue to exercise its best collective judgement as to what course of action and policy mix are deemed most appropriate to ensure maximum sustainable growth for the thai economy. challenges from capital flows and exchange rate volatility let me now turn my discussion to a topic that has attracted a lot of attention recently, namely the issue of capital flows and exchange rate. the appreciation of the thai baht this year up to late april has raised some concerns. during this period, the baht strengthened nearly 7 percent against the us dollar, and 10 percent against our trading partners ’ currencies. what has caused such movement in thai baht? there is little disagreement that, over a long period of time, exchange rates tend to appreciate in economies with better growth prospects, strong external balances and overall sound fundamentals. over the past decade, currencies in thailand and other parts of asia have followed gradual appreciation trends, broadly consistent with their respective