: expenditures have been below target due to delays in implementing some projects. there may also be some diversion of expenditure to cater for famine relief and other recurrent expenditures. however, with respect to revenue, the government is on target despite the fact that the benchmark was on the basis of a more optimistic growth path. current figures from the kenya revenue authority ( kra ) on the last quarter show tax revenues overshooting their target. • export risks : global growth is expected to decline from 2. 5 percent in 2008 to 1 percent in 2009. although demand for some of kenya ’ s exports is expected to remain robust, recent trade statistics indicate a slowdown in export volume growth. international commodity prices are also expected to decline. however, the impact of the global crisis on kenya ’ s exports may come from reduced aid flows to regional trading partners. • remittances : remittance receipts through formal channels increased from us dollars574 million in 2007 to us dollars630 million in 2008 despite reductions beginning may 2008. the decline could persist with reduction in incomes in source countries. remittances are predominantly used for smoothing consumption and for investment in real estate. but they are also pro - cyclical and tend to follow events in the economy. so their trend may not reveal much. • liquidity risks : while global banks are not lending to each other, local banks are. however, government access to global financial markets may be constrained by weakening of these markets. the postponement of the sovereign bond is a pointer to this. the latest upgrade by fitch rating agency for kenya is improving the country ratings and once global financial markets are stable, kenya ’ s entry will be significant. but more significant will be the target enabling projects targeted to be financed by this bond issue. • on the domestic banking sector, the expectation was that due to the global crisis and the political crisis in 2008, the banking system ’ s net non - performing loans ( npls ) would rise. however, net npls as a share of total loans have come down from 2. 9 in march 2008 to 2. 2 in november 2009. this is due to improved provisioning and a decline in net npls portfolio. the cbk is tracking these risks to assess their likely impact on macroeconomic stability. nevertheless, the economy is expected to weather first round effects of the global crisis. this will be supported by productivity growth from improved business climate and improved policy frameworks. in 2009, we expect a modest

remarks by tiff macklem governor of the bank of canada calgary chamber of commerce september 7, 2023 calgary, alberta economic progress report : target in sight, but we ’ re not there yet introduction good afternoon. it ’ s a pleasure to be here. i want to thank the calgary chamber of commerce and the bank of canada ’ s calgary office for setting up such an impressive event. i look forward to meeting with and hearing from many of you while i ’ m in alberta. monetary policy is working to bring inflation down — and we are encouraged by the progress we ’ ve made so far. consumer price index ( cpi ) inflation was 3. 3 % in july, roughly in line with what we expected in our july monetary policy report. our 2 % target is now in sight. but we are not there yet and we are concerned progress has slowed. monetary policy still has work to do to restore price stability for canadians, and we are committed to staying the course. in my time with you here, i will begin by discussing our recent monetary policy decisions. then i want to dig into the inflation data to give you a sense of what we ’ re seeing and what we ’ re looking for on the path to price stability. i also want to outline the progress we ’ ve seen in rebalancing demand and supply in the economy. how these evolve will be critical to our policy decisions going forward. finally, i want to answer a question we are getting more frequently from canadians : why are we so focused on the 2 % target? isn ’ t being close to 3 % good enough? the short answer is no — and i ’ ll explain why we ’ re committed to getting all the way back to 2 %. our recent monetary policy decisions at both our june and july monetary policy decisions, we increased our policy rate, bringing it to 5 %. these were difficult decisions. but they reflected the accumulated evidence that excess demand in the economy and underlying inflationary pressures were both proving more persistent. and it was our judgment that more restrictive monetary policy was needed to restore price stability for canadians. i would like to thank don coletti and mikael khan for their help in preparing this speech. not for publication before september 7, 2023 1 : 55 pm eastern time - 2the data since mid - july are providing clearer evidence that higher interest rates are moderating spending and rebalancing demand and supply in the economy. however, we remain concerned that overall inflationary pressures are persist