Bank of Canada Annual Report 2004

During 2005, research and analysis will continue to focus on this challenge and on preparing for the renewal of the Bank's inflation-targeting agreement with the Government of Canada in 2006, the annual report said.

"We will also be closely examining the broad economic forces and trends that Canada will face in the years ahead. For example, the rising economic powerhouses of China and India are integrating rapidly into the global economy. Their rapid growth is creating competitive challenges, as well as new markets and opportunities for Canadian companies."

"A related challenge is the buildup of global economic and financial imbalances among countries. The United States is running a massive current account deficit with the rest of the world. Mirroring the U.S. current account deficit are large surpluses elsewhere, particularly in Asia. These global imbalances will be resolved through shifts in the global pattern of saving and consumption and through associated changes in real exchange rates."

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