OTTAWA, April 28 (Reuters) - Inflationary pressures could return faster than expected even in severe recession, the Bank of Canada said on Tuesday.
“One of the mistakes one can make in these situations is to overestimate the speed limit of the economy in a severe recession,” the bank’s governor Mark Carney told the House of Commons finance committee.
“The reality is -- it’s an unfortunate reality -- but in this adjustment process capacity is lost, investment is delayed, productivity is slower than it otherwise would be and so those inflationary pressures could come back sooner than otherwise (expected),” he said. (Reporting by David Ljunggren; Editing by Jeffrey Hodgson)
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