(Source: Financial Post)
Bank of Canada governor Mark Carney says the elements are in place for an economic recovery to begin later this year, and develop in “full force” in 2010.
“The prospect of [the economy] getting better is there. The policies in place for it to get better are absolutely there,” Mr. Carney said in an interview broadcast Sunday on the CBC.
“Part of what is driving recovery in 2010 is policy. It is the fact that monetary policy has been aggressively eased, and secondly there is a big fiscal policy response, not just in Canada but around the world. Those actions are going to start hit later this year, and then really with full force in 2010.”
Even with a recovery, however, Mr. Carney suggested the economy will not return to the “heady days” prior to the onset of the credit crisis, beginning in the summer of 2007. “That’s not likely. It is not likely because there will be an overhang from the financial mess in other countries. It is going to take some time for [this] to be rectified and it is very [likely] that the new equilibrium … is not going to be at the same level.”
Nevertheless, he said he is encouraged by some recent key economic indicators, such as an upturn in consumer and business confidence; a stabilized real estate market; and drawdowns in business inventories, which the governor added are happening “quickly” in Canada.
Read Paul Vieira’s full article “Conditions right for economic recovery later in year: BOC’s Carney” in the Financial Post (May 3, 2009).