October 6, 2009 / 1:51 PM / 8 years ago

Harper says global recovery still fragile

OTTAWA (Reuters) - The global economy is only experiencing a fragile recovery and will not revive properly until the jobless rate starts to fall, Prime Minister Stephen Harper said on Tuesday.

“My general read of the global recovery ... (is) I think there’s a very mild recovery, it’s a very fragile recovery. We’re certainly not out of the woods,” he told Toronto’s Newstalk 1010 radio.

Data released last week showed that Canada’s economy stagnated in July, raising doubts about whether gross domestic product would return to solid growth in the third quarter.

The unemployment rate is at an 11-1/2 year high of 8.7 percent and senior officials say it is likely to increase.

“I don’t think the recovery really has kicked in earnest until we start to see the kind of (improvement) that starts to turn around the unemployment situation,” Harper said.

This January the government unveiled a two-year C$46.5 billion ($43.9 billion) economic stimulus plan and predicts the budget deficit this year will be C$55.9 billion.

Harper said Ottawa would stick to its plan to curb spending growth as the economy recovers. The government says it does not expect to return to surplus until the 2015-16 fiscal year.

“If we keep on that strategy we should -- with discipline -- at the end of the recession gradually return to balance,” Harper said.

($1=$1.06 Canadian)

Reporting by David Ljunggren; editing by Peter Galloway

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