kicks off a new initiative — another step in our ongoing efforts to help canadians better understand our actions and decisions as canada ’ s central bank. now, let me begin. global and canadian economic developments the canadian economy is progressing well. following a decade of many setbacks, 2017 was a year of robust economic growth — 3 per cent for the year as a whole. after many years in which the growth was uneven, it has become more balanced. 1 / 9 bis central bankers'speeches the material slack that existed in the economy, and especially in the labour market, has been largely absorbed. inflation is running close to our target rate of 2 per cent. while the future is subject to some notable uncertainties, which i ’ ll discuss, trends over the past few quarters have been quite encouraging. the trends have been broad - based across regions and sectors, but these favourable economic conditions are particularly evident in some parts of canada, including british columbia. global developments of course, canada is a very open economy, and its growth is supported by what is now a synchronous global expansion. this too is encouraging. we are now seeing solid growth not only in the united states and china but also in europe, as well as in many other emerging - market economies. the us economy has been on a path of mostly solid growth and job creation for a few years. at the beginning of 2018, the data indicated stronger momentum for the united states, and the tax cuts announced just before christmas were expected to boost demand further. developments since then have largely supported this story. us economic growth remained robust, at an annual pace of 2. 5 per cent during the fourth quarter of 2017, and the us economy is essentially at full employment, with the jobless rate at a 17 - year low. wage growth has also edged up in recent months. meanwhile, us business confidence remains high. and increases in government spending legislated in february are likely to provide a further boost in the next couple of years. the us economic picture still has upside potential. the current expansion could create a virtuous circle, triggering “ animal spirits ” among businesses and consumers and driving even faster growth than expected. if that happened, stronger business investment and household spending in the united states would likely benefit our economy. so, as always, we are watching developments in the united states closely. on that note, we saw some sharp movements in us and global stock markets a few weeks ago, ushering in increased market volatility

). the slower - than - expected headline gdp growth number was largely due to higher imports, while exports made only a partial recovery from their third - quarter decline. the gain in imports mainly reflected stronger business investment, which adds to the economy ’ s capacity. there were also some temporary factors influencing imports in the fourth quarter. in addition, housing and government spending contributed more than expected to economic growth. on that note, we ’ ll incorporate the implications of the recent federal budget for the outlook for growth and inflation in the bank ’ s april projection. all that said, uncertainty about the north american free trade agreement ( nafta ) and growing global trade tensions will need to be watched, for their possible impact on the outlook. recent developments with respect to steel and aluminum, alongside increased protectionist rhetoric, carry potentially serious consequences. we do not know how or when the nafta talks or other trade disputes will conclude, and we do not know how industries, or governments, will react. the range of possibilities is wide, which means that trying to quantify any scenario in advance would not be useful for monetary policy purposes. for now, our working assumption is that existing trade arrangements will stay in place over our current two - year projection horizon. as and when concrete outcomes emerge, we will be in a better position to assess their impact on the canadian economy. but even with no changes in our trading arrangements, the uncertainty around them is affecting business investment decisions. the us tax reforms may further reduce the relative attractiveness of investing in canada. for both these reasons, firms may decide to redirect some of their planned investment spending from canada to the united states. our economic projections have been incorporating the judgment that such effects are likely to dampen business investment — as discussed in january. as we prepare our april forecast, we ’ ll assess whether the degree of caution we ’ ve applied is still appropriate. an important indicator will be our spring business outlook survey ( bos ), which we will publish on april 9. 4 / 9 bis central bankers'speeches there are a couple of additional points to note on the export and investment picture. first, with respect to energy exports, spot prices for crude oil have fallen since we published our january forecast, but remain relatively high compared with 2017 ( chart 3 ). however, canada is not seeing the full benefit of oil ’ s recovery because of wider - than - average differences between benchmark global oil prices and prices for canadian heavy oil. to the