Canada maintains growth outlook despite turmoil

Tue Sep 16, 2008 6:29pm EDT
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By Louise Egan

OTTAWA (Reuters) - Canadian Finance Minister Jim Flaherty sees no need to lower his forecast for the country's economic growth, despite a deepening global financial crisis and his expectation of a further slide in U.S. growth.

Flaherty said in an interview with Reuters he was open to the idea of concerted action among policy makers in the world's most developed economies to manage the fallout from the failure of some of Wall Street's biggest firms.

But there is no need to convene an emergency meeting of Group of Seven finance ministers, he said during a pause from campaigning for a federal election set for October 14.

The minister, who is seeking re-election for the Conservative Party, rejected any suggestion he might rethink his latest estimate of 1 percent economic growth in Canada as the outlook for the U.S. economy deteriorates.

At the same time, he considers the 3.3 percent real growth that the United States recorded in the second quarter will be higher than the overall figure for this year.

"The economic forecast that we've been using for the United States is not as positive as some others have been using," he told Reuters in an interview.

"The growth in the second quarter in the United States is not in our view representative of what the growth is going to look like in the United States for the rest of the year. That (was) true before this most recent issue with Lehman Brothers and Merrill Lynch," he said.

Central banks have been pumping funds into markets this week to prevent them from seizing up in response to the bankruptcy filing of Lehman Brothers Holding Inc, the sale of Merrill Lynch and major troubles in insurer American International Group.   Continued...