10 September 2009

 

 

 The Bank of Canada said Thursday the economy is growing at a faster pace than it expected and singled out a stronger currency as the major risk to recovery from the first recession since 1992.

 

Central bank Governor Mark Carney and his inner circle of advisers concluded their latest round of policy discussions with a decision to maintain their pledge to leave the benchmark target at a record low of 0.25 per cent until the middle of next year, barring an unforeseen burst of inflation.

 

In a statement, the central bank said economic and financial developments since July are “broadly” in line with what Mr. Carney and the rest of the Governing Council had anticipated.

 

Recent indicators ,,, “point to the start of recovery in major economies, supported by aggressive policy stimulus and the stabilization of global financial markets,” the Bank of Canada said. …

 

The central bank didn't offer a revised forecast. That will come when policy makers release their next quarterly economic report on Oct. 22.

 

The Bank of Canada's view that the recovery it heralded in July is on track was bolstered by fresh evidence that Canadian companies are benefiting from a global economy that is stirring from the deepest downturn since the Second World War.

 

Canadian exports increased 3.3 per cent in July from June, and imports surged 8.3 per cent, the first gain in five months, Statistics Canada reported Thursday.

 

Because imports grew faster than exports, Canada recorded a trade deficit of $1.4-billion in July. Still, analysts seized on the report as a positive sign that economic activity is coming back to life, bolstering a growing number of forecasts that Canadian GDP will expand this quarter. …

 

Canada's dollar is rising because global demand for oil, gold and the other commodities it produces are also on the rise and because the country's economy remains relatively strong amid the wreckage of the financial crisis.