Bank of Canada Governor Stephen Poloz said there’s no reason to believe a recent jump in the nation’s inflation rate will persist given excess capacity in the economy.
The rise largely refects one-off increases such as the effects of a weaker Canadian dollar, Poloz told reporters in Cairns, Australia, following a meeting of officials from the Group of 20. The inflation rate would be expected to drop as long as the economy operates below its potential, he said.
“So much of the uptick in inflation that we’ve seen over the last five or six months has been in what we call one-off categories,” Poloz said. “We know the Canadian economy has a significant amount of room to grow.”