Confirmed by the Governor of the Bank of Canada, Tiff Macklem, in statements made yesterday, Thursday, that the "excess demand" which was a key factor in fueling inflation has gradually disappeared from the economy.

These statements come in the context of a seminar held at the Saint John Chamber of Commerce in the Canadian province of "New Brunswick".

These statements came a day after Statistics Canada announced a slowdown in the annual inflation rate to 3.1% in October, compared to 3.8% in the previous month and a decrease of five percentage points from the record numbers recorded in June 2022.

Since March 2022, the Bank of Canada has rapidly increased the key interest rate in an attempt to cool down the economy and reduce spending demand, efforts that Macklem indicated are expected to continue limiting inflation in the coming months.

Macklem explained during his talk: "We expect economic activity to continue slowing in the coming months, indicating further potential inflation pressures in the future".

He added: "Overall, the excess demand that was significantly contributing to raising price levels has now disappeared".

In his speech, Macklem acknowledged that the impact of high interest rates is putting pressure on Canadians despite the slowdown in inflation rates, noting that "the reward is worth the effort" when the Bank of Canada achieves price stability and brings inflation back to its target of 2 percent.

Macklem pointed out that interest rates "may now be sufficiently constrained" to control price pressures, but he emphasized the central bank's readiness to raise interest rates again if high inflation persists. The central bank has kept the interest rate steady in two consecutive sessions.