BOC’s Rogers: Low Canadian productivity is an emergency

  • In future, inflation may be more of a threat than it has been over past few decades
  • Productivity is a way to inoculate the economy against inflation
  • Level of productivity in Canada’s business sector is more or less unchanged from where it was 7 years ago
  • Recently we’ve had firms say current interest rate environment is making investment more difficult
  • But investment levels were also weak in pre-pandemic years, when rates were much lower than today

This isn’t something you want to hear if you’re a CAD bull:

I want to talk about Canada’s long-standing, poor record on productivity and show you just how big the problem is. You’ve seen those signs that say, “In emergency, break glass.” Well, it’s time to break the glass.

USD/CAD is down 22 pips to 1.3562 today as she didn’t mention the outlook for monetary policy in the shorter term.

This article was written by Adam Button at Source