Monetary Policy Report—July 2026
Data available as: CSV, JSON and XML Data available as: CSV, JSON and XML Available as: PDF Overview After a year of weakness, Canada’s economy is showing signs of improvement. Growth is expected…
Overview
After a year of weakness, Canada’s economy is showing signs of improvement. Growth is expected to pick up, and inflation eases gradually from its recent peak. Uncertainty is still high.
Current conditions
Economic growth in Canada has been weak but is set to pick up. Headline inflation has risen above 3%. If oil prices and gasoline refinery margins decline as assumed, inflation should ease in the coming months. Inflation excluding gasoline remains near 2%.
Tariff and other assumptions
Trade within North America remains mostly free of tariffs, but some industries have been heavily affected by sector-specific measures. Oil prices are assumed to decline.
Outlook
Economic growth is expected to pick up over the projection horizon, rising above potential output growth. Inflation is elevated in the near term before returning to target as cost pressures fade and excess capacity is absorbed.
Global economy
The war in the Middle East has pushed up inflation around the world and is weighing on global economic activity. But oil prices have fallen from their peak, and inflation is expected to ease. Investment in AI is boosting global growth.
Projections
The outlook for Canadian growth is broadly unchanged. After a weaker-than-expected start to 2026, GDP growth is projected to be slightly stronger in 2027 and 2028. Although near-term inflation has been a bit higher than anticipated, the outlook for inflation is little changed.
Risks
The evolution of Canada’s trade relationship with the United States and the war in the Middle East remain the two most important risks to the outlook for inflation.
In focus
War‑related supply disruptions are passing through to consumer prices
The conflict in the Middle East has generated both direct and indirect cost pressures that continue to feed through supply chains. These cost pressures are material for the inflation outlook.
The Monetary Policy Report is a product of the Governing Council of the Bank of Canada: Tiff Macklem, Carolyn Rogers, Toni Gravelle, Sharon Kozicki, Marc-André Gosselin, Nicolas Vincent and Michelle Alexopoulos. Learn about Canada’s inflation-control strategy, the objective of Canada’s monetary policy and the main instruments used to implement it. Our Valet API is designed to help you integrate your applications and processes with our data. For details, please see our documentation.Bank of Canada maintains the policy rate at 2¼%
The Bank of Canada today held its target for the overnight rate at 2.25%, with the Bank Rate at 2.5% and the deposit rate at 2.20%. Content Type(s): Press, Press releasesMonetary Policy Report Press Conference Opening Statement
Governor Tiff Macklem discusses the Monetary Policy Report and the key issues involved in the Governing Council’s deliberations about the monetary policy decision. Content Type(s): Opening statements, Press, Speeches and appearancesPress Conference: Monetary Policy Report – July 2026
Release of the Monetary Policy Report – Press conference by Governor Tiff Macklem and Senior Deputy Governor Carolyn Rogers (10:45 (ET) approx.).
Content Type(s): Press, Speeches and appearances, WebcastsISSN 1490-1234 (Online)
Figures reflect the source report and its stated period. This article is for information and is not investment advice.
