Thursday, March 12, 2009

IMF says Canada 'has more resilience'

The Toronto Star: The International Monetary Fund says Canada is 'better placed than many countries' but its economy will still likely suffer more intensely in the near term amid 'the rapid deterioration in the global environment.'...

'Weakening global demand has prompted a retreat in commodity prices, with effects particularly on the western provinces. Global financial strains have also spilled over to Canada, although its financial system is faring better than many abroad.'

The IMF team found that Canada has more resilience than many other countries thanks to sound macroeconomic policy including past government debt reduction and low inflation. It also said national authorities responded quickly to the crisis, and the federal budget and stimulus package presented in January 'was large, timely, and well targeted, and it will buoy demand during the downturn.'

The report also noted that Canada's banks are well capitalized and have avoided the large losses experienced in other countries. 'Moreover, credit growth has held up well, and financial strains are markedly less serious than elsewhere.'