the external disturbances, this is not a bad economic outcome. and for this, we can thank our sounder fiscal position and low and stable inflation, which have helped us weather the international instability better this time around. these same factors, coupled with calmer financial markets, have allowed the bank to lower the bank rate four times since the autumn ( fully reversing last august ’ s increase ), and to refocus attention on the medium - term objective of keeping inflation within the 1 to 3 per cent target range. currently, inflation is just inside the bottom of the range. the economic outlook as i said before, the world economic horizon is now clearer. interest rate reductions around the world - - most recently across the euro area - - have helped to rebuild investor confidence and to calm global financial markets. this includes markets in the troubled southeast asian economies, where progress is being made on structural reforms and the outlook for a turnaround this year and next has improved, especially in south korea, but also in thailand and malaysia. there are also signs that the financial situation in brazil, which looked precarious in late 1998, is now stabilizing with the adoption of measures to address imbalances in the country ’ s fiscal and external accounts. what is less clear is the extent of short - term economic weakness one can expect in latin america because of the difficulties in brazil. there has also been a slowdown in the pace of economic expansion in europe. but easier monetary conditions - - that is, lower interest rates and the lower value of the euro - - should help offset some of the economic weakness there. and these lower interest rates are a positive element for the international economy as a whole. the main question mark in the outlook continues to be the japanese economy, which has been in recession since late 1997. even if stimulative macroeconomic policies are pursued systematically, and progress continues on banking sector reform, it is rather unlikely that there will be much of a recovery there before the year is out. in contrast, the u. s. economy continues to flourish, consistently outperforming expectations and with no sign of inflationary pressures. that economy ended 1998 on a much stronger note than had been expected. and the momentum of u. s. economic activity in early 1999 is greater than most forecasters had predicted. from a canadian perspective, this is the most positive element in the current external economic environment, as anyone who sells to u. s. markets can confirm. strong

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