Canadian Economy on the Rise

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Finance Minister Jim Flaherty noted on Tuesday that Canada’s economic growth rate should be a bit better for the remainder of 2009 and in 2010 after a moderate performance in the third quarter.

Flaherty did however play down the potential threats that face recovery, which includes the strong Canadian dollar and the Dubai debt problem.

Canada has just made its way out of the recession in the third quarter, after having three quarters of contraction, however the 0.4% annualized growth rate did not met market expectations of 0.7% growth rate and the Bank of Canada’s earlier 2% forecast.

Although there was another rise with the Canadian dollar, it does not warrant any special measures to be taken like the Japanese central bank did noted Flaherty.

The Canadian dollar has appreciated sharply against the U.S. economy for much of 2009, which has prompted the Bank of Canada governor Mark Carney to make a warning last month, concerning the currency’s rise could delay recovery, and possibly warrant central bank reactions.

Well, it is not like we have not seen a warning being made almost every month concerning the rising loonie.

With the loonie losing some of its ground after the news of Dubai World’s debt problems, it began to quickly resume its climb this week as it closed on Tuesday at 95.57 cents (U.S.).

Let us see if the Bank of Canada does step in to control the loonie or any other problems that might be delaying recovery.

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