The COVID-19 pandemic will leave some long-term economic damage that will only become clearer as the country moves further along a 91裸聊视频減rolonged and bumpy91裸聊视频� course to recovery, Canada91裸聊视频檚 top central banker says.

In his first speech as governor, Tiff Macklem said the central bank expects to see growth in the third quarter of this year as people are called back to work and households resume some of their normal activities as restrictions ease.

But he quickly warned Canadians not to expect the short and sharp economic bounce-back expected over the coming months to last.

The combination of uneven reopenings across provinces and industries, the unknown course of consumer confidence, and unemployment rates will 91裸聊视频渓ikely inflict some lasting damage to demand and supply,91裸聊视频� Macklem said in a speech Monday.

The exact extent of the damage in terms of the number of lost jobs and business closings won91裸聊视频檛 become clear until the country is further along the reopening phase.

And even when things start looking up, he said there is the potential for setbacks from new outbreaks.

91裸聊视频淎s we get through that reopening phase, though, we do think that the pace of the recovery will slow and that will reflect the reality that not everybody91裸聊视频檚 job is coming back,91裸聊视频� Macklem said at a midday press conference.

91裸聊视频淪ome companies aren91裸聊视频檛 going to make it to the other side of this. New companies will form, existing companies will seize new opportunities, but that takes some time and that91裸聊视频檚 going to be a slower, bumpier process that is going to require ongoing support.91裸聊视频�

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The central bank91裸聊视频檚 support against the economic shock caused by the pandemic has been a drop to its policy interest rate to 0.25 per cent, which Macklem says is as low as it will go.

The Bank of Canada has also launched a purchasing program of bonds and government debt to help markets function and make borrowing cheaper for households and businesses. Such purchases, known as quantitative easing, also send a signal that the bank91裸聊视频檚 key rate 91裸聊视频渋s likely to remain low for a long period,91裸聊视频� he said in his speech.

The bank has a number of other tools it can use to deliver some monetary stimulus beyond the interest rate, Macklem said, including scaling its purchasing programs or providing more direct forward guidance on activities as other central banks have done.

91裸聊视频淕oing forward, the types of measures we take will depend on the circumstances. Different measures have different effectiveness in different circumstances. And they will be guided by the achievement of our inflation target,91裸聊视频� he told reporters.

91裸聊视频淲e91裸聊视频檒l be flexible, we91裸聊视频檒l be resolute, we91裸聊视频檙e going to be innovative and we91裸聊视频檙e going to be determined.91裸聊视频�

For the Bank of Canada, the impact of structurally low interest rates and the scale of the shock are having what Macklem said is 91裸聊视频渁 profound impact91裸聊视频� on the inflation-rate target.

The central bank targets an annual inflation rate of two per cent as measured by Statistics Canada91裸聊视频檚 consumer price index.

The basket of goods used to form the index has been shaken by a shift in consumer spending habits during the pandemic. People are spending less on gasoline, which usually receives a heavier weight in calculating inflation, as its price has plunged and the frequency of car travel has dropped. Spending is also down on travel, while grocery spending is up.

Last week, Statistics Canada reported the annual pace of inflation was -0.4 per cent in May, marking the second consecutive month for negative annual inflation after a reading of -0.2 per cent in April.

In his speech, Macklem said the bank expects supply to be restored faster than demand, which could put downward pressure on inflation. BMO91裸聊视频檚 Benjamin Reitzes wrote in a note that Macklem91裸聊视频檚 message suggests bank policy remaining easy for some time.

Next month, the Bank of Canada will provide 91裸聊视频渁 central planning scenario91裸聊视频� for the economy and inflation to help guide bank policy, as well as related risks 91裸聊视频� such as local, but not national, lockdowns.

91裸聊视频淭he central scenario would embody the reality that there probably will be some more local flair-ups,91裸聊视频� Macklem said.

91裸聊视频淗opefully, with each flair-up we get better at targeting it, isolating it, and closing it down faster than the one before.91裸聊视频�

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Jordan Press, The Canadian Press

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