The Bankwatch

Tracking the consumer evolution of financial services

International Monetary Fund Review of Canada

A quick summary of the Canadian economy from the IMF is generally positive but notes the potential risks already identified by the Bank of Canada, namely consumer debt and impacts felt from the elephant south of the border.

Transcript of a Teleconference Call on the International Monetary Fund’s 2010 Article IV Review of Canada | IMF

One is we see Canada having weathered the global recession very well, in part, thanks to a big monetary and fiscal stimulus that’s helped to support demand. Another factor we’d point to: unlike in a number of other countries, the financial system has avoided systemic pressures so that it’s maintained the ability to provide credit through the recovery.

The other we’d point to is that the economic recovery is moderating from where we saw in the first half of this year. There remain a number of risks on the horizon. Two factors that we’ve flagged in the report are high household debt levels, and on the external, risks particular to the U.S. economy.

That said, we see macroeconomic policies as having the right tilt. Monetary policy tightening has paused and monetary conditions remain on the accommodative side, which we think is right given the slowdown in the economy and the risks. Fiscal policy also has smoothed. Some steps have been taken to support the recovery on that end.

Written by Colin Henderson

December 24, 2010 at 00:11

Posted in Uncategorized

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