The Bank of Canada July 2026 report said the country’s economy is expected to regain momentum following a year of subdued activity, while inflation is projected to ease gradually after moving above 3%.
What the Bank of Canada July 2026 Report Signals for Growth and Inflation
In its Monetary Policy Report, the central bank said inflation excluding gasoline was near 2%. It expects headline inflation to decline in the coming months, based in part on assumptions that crude prices and gasoline refining margins will fall.
The Bank said output growth should rise above potential growth over its forecast period. It described its outlook for Canadian growth as broadly unchanged, although it expects somewhat firmer expansion in 2027 and 2028 after a weaker-than-expected start to 2026.
North American trade remains largely tariff-free, the report said, though sector-specific measures have significantly affected some industries. The Bank identified the future of Canada’s trade relationship with the United States and the Middle East conflict as the main risks to its inflation outlook.
The conflict has lifted global inflation and restrained worldwide activity through supply disruptions and higher costs, according to the Bank. It said oil prices had retreated from their earlier high and that investment related to artificial intelligence was supporting global growth.
The report was released alongside the Bank’s decision to hold its policy interest rate at 2.25%. Read the Bank of Canada’s Monetary Policy Report.
