The Bank of Canada made a poor prediction on what Canada’s inflation level would be at the end of 2022, said the bank’s governor, Tiff Macklem. He had previously said he expected the national inflation level to be around 2 percent by the year’s end.
“That’s a very big forecast error,” Macklem told the Globe and Mail in a year-end interview on Dec. 16.
As of October, Canada’s inflation level sat at 6.9 percent—almost five points higher than Macklem predicted it would be by the end of December.
“So, yes, we have some explaining to do,” Macklem said.
“If we’d known that there wasn’t going to be another [COVID] wave, and that the economy would reopen rapidly, and that households would come very rapidly back into the market and try to catch up and buy so many of the services that they hadn’t been able to enjoy for the last couple of years—yes, I think if we could have foreseen that, we would have started to raise interest rates earlier.”…