ANKARA (Reuters) - Structural reforms being planned by the world’s major economies have taken on increased importance because global growth has fallen behind forecasts, Canadian Finance Minister Joe Oliver told Reuters on Friday.
Oliver was speaking ahead of a meeting of finance ministers and central bank governors of the Group of 20 (G20) leading economies, which he said would focus on “how to deal with the instability and how to get growth growing again.”
Canada co-chairs with India a G20 committee on growth strategies, which were meant to add 2 percent to the world’s economic activity over five years and which he said would achieve their purpose if carried out.
“Implementation is key,” Oliver said.
“But in the mean time, events keep intervening, and there are serial disappointments, and what (International Monetary Fund Managing Director) Christine Lagarde has called ‘the new mediocre’ is something that we seem to be confronting.”
All this makes it more important than ever for G20 countries to deliver on promised plans, he said.
The Conservative minister rejected the call by the opposition Liberal Party, made last week as part of the Canadian election campaign, to run deficits of up to C$10 billion ($7.6 billion) a year for the next two fiscal years to help boost infrastructure spending.
“We believe strongly that in spite of the international challenges which we and other countries have to confront, we’re on the right path, and it’s really important to stay the course of a low-tax plan for jobs and growth,” he said.
“We think getting into long-term structural deficits are precisely the wrong thing to do.”
Oliver said that the government’s plans for family benefits and infrastructure spending was already putting C$10 billion into the economy without resorting to a new deficit.
The minister highlighted that Canada’s economy grew strongly in June after several months of shrinking, the budget was on track for balance, exports have resumed their growth, consumer confidence was still there and what has become a robust U.S. recovery was now helping Canadian manufacturing.
“So there is clearly positive news after a period of five months of contraction,” he said.
Reporting by Randall Palmer; Editing by Nick Tattersall