Thank you, Mr. McCallum.
As we pointed out in our latest interest rate announcement when we lowered rates by another 50 basis points, the data has been weaker than expected. We knew that in the first half of this year there would be a string of bad news--we mentioned that. As you point out, the recovery that we projected starting in the second half of this year is very much predicated on confidence rebounding as the financial situation improves and is resolved. That's a precondition to recovery and the recovery of confidence that comes with it.
We said in our report that the first half of this year would be weaker than expected and the contraction of output would be stronger. Potential delays in stabilizing the global financial system, together with larger than anticipated confidence and wealth effect on domestic demand in Canada, could mean that the output gap will not begin to close until early in 2010.
In our monetary policy report update we had growth above potential output, as you may remember, starting in the fourth quarter of this year. I think we're delaying that. We're saying it won't happen until the beginning of 2010.
We don't have a complete projection at this point. We will have a complete projection. We will be coming out with the monetary policy report in mid-April.