1. 1 per cent. the expansion in both 2017 and 2018 should be about 2. 0 per cent, which is above the growth rate of potential. however, because the output gap is now somewhat larger and will close later than we projected in july, the profile for inflation is now slightly lower. we project that total cpi inflation will remain below 2 per cent through the end of the year and be close to the 2 per cent target in 2017 and 2018. the outlook is clouded by a number of uncertainties. these include the macroeconomic effects of the new mortgage rules, the likely path of our exports, the impacts of the federal government ’ s fiscal measures and the effects of the us election on business confidence. given the two - sided nature of these uncertainties, and with the flexibility inherent in our inflation - targeting framework, we judged that the current setting for monetary policy remains appropriate. let me now talk about the renewal of the inflation - targeting framework. today, the bank and the government announced that we will continue to target inflation at the 2 per cent midpoint of a 1 to 3 per cent range for another five years. this is good news, as our framework has served 1 / 2 bis central bankers'speeches canadians well, in both calm and turbulent times, for 25 years. the framework ’ s track record is impressive. annual inflation has averaged almost exactly 2 per cent since 1991. inflation has also been more stable, which has meant that unemployment and interest rates have become lower and more stable. in turn, this has helped households and firms make spending and investment decisions with more confidence, encouraged investment, contributed to sustained growth in output and productivity, and improved canada ’ s standard of living. as is the case at every renewal, a great deal of research and analysis went into the process, and we took on board the experiences and lessons of the past five years. bank staff published dozens of research papers and worked with researchers from other central banks and academic institutions as well as private - sector economists. and, as usual, we asked some fundamental questions to make sure inflation targeting is still delivering its economic benefits effectively. we examined potential alternatives to inflation targeting to see if they provide even more benefits. that is one of the great advantages of our five - year renewal cycle — the framework is not set in stone ; we are always looking for ways to improve it. now, it is fair to say that even after years of very low interest rates, the recovery from the great recession in many economies

mark carney : summary of canada ’ s january 2013 monetary policy report opening statement by mr mark carney, governor of the bank of canada and chairman of the financial stability board, presented to the house of commons standing committee on finance, ottawa, ontario, 12 february 2013. * * * good morning. tiff and i are pleased to be here with you today to discuss the january monetary policy report, which the bank recently published. • while the global economic outlook is slightly weaker than the bank had projected in october mpr, global tail risks have also diminished. • the economic expansion in the united states is continuing at a gradual pace, restrained by ongoing public and private deleveraging, global weakness and uncertainty related to fiscal negotiations. • europe remains in recession, with a somewhat more protracted downturn now expected than in october. • growth in china is improving, though economic activity has slowed further in some other major emerging economies. • supported by central bank actions and by positive policy developments in europe, global financial conditions are more stimulative. • commodity prices have remained at historically elevated levels, though temporary disruptions and persistent transportation bottlenecks have led to a record discount on canadian heavy crude. • in canada, the slowdown in the second half of 2012 was more pronounced than the bank had anticipated, owing to weaker business investment and exports. • caution about high debt levels has begun to restrain household spending. • the bank expects economic growth to pick up through 2013. • business investment and exports are projected to rebound as foreign demand strengthens, uncertainty diminishes and the temporary factors that have weighed on resource sector activity are unwound. • nonetheless, exports should remain below their pre - recession peak until the second half of 2014, owing to a lower track for foreign demand and ongoing competitiveness challenges, including the persistent strength of the canadian dollar. • consumption is expected to grow moderately and residential investment to decline further from historically high levels. the bank expects trend growth in household credit to moderate further, with the debt - to - income ratio stabilizing near current levels. • relative to the october mpr, canadian economic activity is expected to be more restrained. following an estimated 1. 9 per cent in 2012, the economy is expected to grow by 2. 0 per cent in 2013 and 2. 7 per cent in 2014. the bank now expects the economy to reach full capacity in the second half of 2014, later than anticipated in october. • core inflation has softened