A few of us journalists got Bank of Canada Governor Stephen Poloz talking about forecasting over the weekend. The International Monetary Fund earlier had revised its outlook for global economic growth higher, instead of lower, which had been its habit for the previous six years. It seemed important, but Poloz’s enthusiasm was muted. “If you balance the risks in your forecast, you know there is a 50-50 chance just through normal data that you are going to have a positive one,” he said. “And so it’s not necessarily as significant as you make it sound.”
Poloz’s reluctance to fully embrace the shift in economic prospects has become a thing. Bay Street is cheering the rebound. “Although it is still early days and risks abound, signs are pointing to an economy that looks increasingly poised to shake off the setback of recent years,” Brian DePratto, an economist at Toronto-Dominion Bank, said last month when Statistics Canada reported gross domestic product grew at an annual rate of 2.6 percent in the fourth quarter, the fastest in years. The Bank of Canada held back. “While the recent rebound in GDP is encouraging, it is too early to conclude that the economy is on a sustainable growth path,” the central bank said in its latest policy statement on April 12.
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