Key facts
- New US tariffs could slash Canada's fourth-quarter growth to below 1%, according to Bank of Canada Governor Tiff Macklem.
- The tariffs may cause businesses to delay investment and hiring decisions.
- Canada's annual inflation rate is 3%, above the bank's 2% target.
- Rising oil prices present an upward risk to inflation.
- New Zealand's central bank chief noted persistent high oil prices could lead to higher inflation.
- New Zealand's economic recovery is expected to strengthen and broaden, supported by exports and a gradual increase in household spending.
New US tariffs could significantly reduce Canada's economic growth in the fourth quarter, potentially bringing it below 1%, Bank of Canada Governor Tiff Macklem said. Macklem indicated that this escalation of trade tensions could lead businesses to postpone investment and hiring decisions.
Macklem noted that while slower growth might help to moderate inflation, the ongoing conflict in the Middle East and rising oil prices present an upward risk to inflation. Canada's annual inflation rate currently stands at 3%, exceeding the Bank of Canada's 2% target.
In New Zealand, Reserve Bank Governor Anna Breman said on Tuesday that persistent high oil prices could lead to somewhat higher inflation than previously forecast. She added that significant risks remain for the country's economic recovery, though it is expected to strengthen and broaden, supported by exports and a gradual increase in household spending. The RBNZ raised its main cash rate by a quarter point to 2.75% at its September policy meeting.