Canada Chart Pack (May 2026)

In our baseline scenario, WTI averages $80pb over the second half of the year. This will boost GDP growth slightly and keep headline inflation above 2.5% in the coming months. But the backdrop of weak underlying activity, limited risk of second-round effects and uncertainty over CUSMA should mean the Bank of Canada leaves interest rates unchanged this year. In a more adverse scenario, where oil prices remain above $100pb this year, the upside risks to core inflation would prompt the Bank to hike rates.