grow in the lower part of the range of estimates that the bank presented in april. potential output growth should eventually recover as existing capacity expands and new firms are created in the non - resource sectors. this process will unfold over a long period. taking this on board, we can expect the economy to return to its full potential around mid2017. the underlying trend in inflation is still around 1. 5 to 1. 7 per cent. core inflation is currently higher than the underlying trend, because the lower dollar is raising the prices of imports. today, we published a paper that outlines our staff estimates of exchange rate passthrough to inflation. total inflation, however, remains much lower than the underlying trend because of past declines in fuel prices. we expect inflation to return to 2 per cent in a sustainable way as the output gap closes. we see the risks around the profile for inflation as roughly balanced. as part of our risk management approach to monetary policy, governing council always considers financial stability risks. we know that accommodative policy has implications for financial vulnerabilities in the household sector. in the current context, getting the economy back to full capacity with inflation on target is central to supporting financial stability over the longer term. taking all of these developments into consideration, the bank judges that the current stance of monetary policy remains appropriate. therefore, we kept the target for the overnight rate at 1 / 2 per cent. we would now be happy to take your questions. bis central bankers ’ speeches

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