Timeline for ending economic crisis 'premature': Harper
David Akin , Canwest News Service
Published: Sunday, November 23, 2008
LIMA, Peru - Prime Minister Stephen Harper signed on to a final declaration by Pacific Rim leaders stating that the economic and financial crisis would be over in 18 months but then told reporters he thought it premature to make such a prediction.
The relatively rosy declaration by the Asia Pacific Economic Cooperation forum was made Sunday morning, just as Harper's Finance minister was telling a Canadian television audience that Canada could be in a recession now.
"We may well be in a technical recession," Finance Minister Jim Flaherty said Sunday on CTV's Question Period.
It was the first time that Flaherty has conceded that Canada's economy is in recession - defined by most economists as two consecutive quarters in which gross domestic product shrinks.
Speaking to reporters here after the conclusion of the APEC summit, Harper said he agreed with Flaherty's assessment.
"The most recent private sector forecasts suggest the strong possibility of a technical recession at the end of this year and beginning of next," Harper said. "I am surprised at this. I am further surprised, more importantly by deflationary pressure that we're seeing around the world," Harper said.
"This is a worrying development. This is one of the reasons it may be necessary to take unprecedented fiscal stimulus."
Harper declined to discuss specific measures his government may be considering.
The GDP numbers for the fourth quarter of 2008 will not be released until March 2 and the numbers for the first quarter of 2009 won't be out until June 1. So neither the government nor Canadians will be able to say definitively until June 1 if Canada is in a recession right now.
Given the slowdown in the United States, Canada's largest trading partner, Canada's recent economic performance seems to have defied the experts. For example, as car sales plummeted in the U.S. last month, car sales in Canada actually rose by one per cent. The U.S. economy has shed more than one million jobs in the last 12 months while Canada's economy, at the end of October, had created a staggering 223,000 new jobs in the same period.
Flaherty is to present his annual fall economic update on Thursday. That update is expected to contain the government's latest forecasts for economic growth and how slowing growth is affecting the federal treasury.
Here at the Asia Pacific Economic Cooperation forum, the leaders of 20 Pacific Rim countries wrapped up two days of meetings by declaring, "We are convinced that we can overcome this crisis in a period of eighteen months."
Harper told reporters that line was inserted in the group's finale communique at the request of the meetings' host, Peruvian President Alan Garcia.
"I think it would be premature to speculate on that kind of timeline," Harper said.
APEC leaders also declared that they would refrain from bringing in any new trade barriers for at least 12 months.
On Friday, as if to underline his commitment to the principle of open trade, Harper and Colombian President Alvaro Uribe signed a free trade deal between the two countries that, once it is in place some time after 2010, could open up new market for Canadian beef, pork, and other products.
Sunday, November 23, 2008
Posted by Fillibluster at 4:36 PM