Economic recovery not on the horizon yet

After meeting with the G20 finance ministers and Central Bank governors in London, United Kingdom from Sept. 4 to 5, Canada’s Minister of Finance Jim Flaherty provided an outlook on the current state of the global economy.

Flaherty stated in a Sept. 5 conference call with Canadian media that progress has been made in improving the global economy and that growth is expected in 2010.

Despite these improvements, it is uncertain when the economy will start to recover.

“I would be cautious about talking about early stages of recovery,” said Flaherty.

“What we agreed to here as ministers in the G20 [is] that the world economy is stabilizing. We also agreed that no clear recovery is evident. So we’re being very cautious because we fear going back into recession, which is the lesson from the 1930s.”

The G20, consisting of the world’s 19 largest economies and the European Union (EU), reviews and discusses policies pertaining to the international financial system.

“This weekend’s meeting here in London was an opportunity to compare progress on implementing the commitments made by all G20 nations in the April summit,” said Flaherty.

The commitments made in April were aimed at stabilizing the global economy that has been under recession for the past year.

These commitments included providing a total of US$1.1 trillion to support the International Monetary Fund (IMF) in providing aid to struggling economies and to create a new IMF overdraft facility, boost world trade and support development banks in lending to developing countries.

“If you consider the financial turmoil that the world was undergoing just a year ago, it’s evident that the collective response by our nations is making a difference,” said Flaherty.

Canada is among the largest providers of fiscal stimulus in the G20. The impact of the stimulus funding has created progress towards economic growth.

“As of June this year, 80 per cent of our stimulus was being implemented,” said Flaherty.

However, the possibility of a federal election will only be disruptive, according to Flaherty, in the continuance of government action.

“What we should be focusing on now … is getting our economy growing again,” said Flaherty.

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