By Louise Egan and Nick Edwards
PARIS, Feb 19 (Reuters) - The Canadian economy may have had a bigger growth spurt at the end of 2010 than previously thought and the strong Canadian dollar is no longer a major obstacle for businesses, Canadian policymakers said on Saturday.
The upbeat note on the domestic economy came as G20 finance ministers and central bank governors wrapped up meetings in Paris aimed at rebalancing global growth to prevent another financial crisis.
Central bank chief Mark Carney suggested his projection in January of 2.3 percent annualized growth in the fourth quarter could be tweaked higher after growth came in at a disappointing 1 percent in the third quarter.
'Is it possible that the fourth quarter is going to be firmer than we had projected in our last monetary policy report? Yes, it is,' he told reporters following a meeting of G20 finance ministers and central bank governors.
He said it was too early to say whether that would affect the central bank's outlook for 2011 and beyond. The bank formally updates its forecasts on a quarterly basis and its next outlook is due in April.
Canada unexpectedly reported a trade surplus in December after nine months of deficit as exports surged at their fastest pace in nearly three decades.
The trade data is just one of many factors feeding into the bank's forecasts, Carney said.
'We don't want to put too much weight on one data point, irrespective of the data point ... we also don't want to put too much weight on one quarter,' he said.
The central bank has kept interest rates on hold since September and analysts polled by Reuters expect it to resume hiking rates in the first half of this year, with May being the most likely date for the next move.
Earlier this month, Carney's deputy Tiff Macklem said the Canadian economic recovery was proceeding broadly as anticipated, with a period of more modest growth expected after rapid economic rebound in late 2009 and early 2010.
The bank expects net exports to play a bigger role in driving growth this year, along with business investment.
But the strong Canadian dollar, which this week shot up to a three-year high against the U.S. dollar, has been a major headache for exporters as they struggle with weak demand in their top market, the United States.
Finance Minister Jim Flaherty suggested the currency was no longer such a big obstacle for businesses.
'I think the (Canadian) dollar where it is, is comfortable for Canadian business overall,' he told Reuters Insider television in an interview.
The currency has hovered near parity with the U.S. dollar so far in 2011 after appreciating about 6 percent last year, a trend Flaherty said reflected the strong economy and fiscal position.
(Reporting by Louise Egan and Nick Edwards, editing by Mike Peacock) Keywords: CANADA ECONOMY/CARNEY (louise.egan@thomsonreuters.com; Reuters Messaging: louise.egan.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2011. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
PARIS, Feb 19 (Reuters) - The Canadian economy may have had a bigger growth spurt at the end of 2010 than previously thought and the strong Canadian dollar is no longer a major obstacle for businesses, Canadian policymakers said on Saturday.
The upbeat note on the domestic economy came as G20 finance ministers and central bank governors wrapped up meetings in Paris aimed at rebalancing global growth to prevent another financial crisis.
Central bank chief Mark Carney suggested his projection in January of 2.3 percent annualized growth in the fourth quarter could be tweaked higher after growth came in at a disappointing 1 percent in the third quarter.
'Is it possible that the fourth quarter is going to be firmer than we had projected in our last monetary policy report? Yes, it is,' he told reporters following a meeting of G20 finance ministers and central bank governors.
He said it was too early to say whether that would affect the central bank's outlook for 2011 and beyond. The bank formally updates its forecasts on a quarterly basis and its next outlook is due in April.
Canada unexpectedly reported a trade surplus in December after nine months of deficit as exports surged at their fastest pace in nearly three decades.
The trade data is just one of many factors feeding into the bank's forecasts, Carney said.
'We don't want to put too much weight on one data point, irrespective of the data point ... we also don't want to put too much weight on one quarter,' he said.
The central bank has kept interest rates on hold since September and analysts polled by Reuters expect it to resume hiking rates in the first half of this year, with May being the most likely date for the next move.
Earlier this month, Carney's deputy Tiff Macklem said the Canadian economic recovery was proceeding broadly as anticipated, with a period of more modest growth expected after rapid economic rebound in late 2009 and early 2010.
The bank expects net exports to play a bigger role in driving growth this year, along with business investment.
But the strong Canadian dollar, which this week shot up to a three-year high against the U.S. dollar, has been a major headache for exporters as they struggle with weak demand in their top market, the United States.
Finance Minister Jim Flaherty suggested the currency was no longer such a big obstacle for businesses.
'I think the (Canadian) dollar where it is, is comfortable for Canadian business overall,' he told Reuters Insider television in an interview.
The currency has hovered near parity with the U.S. dollar so far in 2011 after appreciating about 6 percent last year, a trend Flaherty said reflected the strong economy and fiscal position.
(Reporting by Louise Egan and Nick Edwards, editing by Mike Peacock) Keywords: CANADA ECONOMY/CARNEY (louise.egan@thomsonreuters.com; Reuters Messaging: louise.egan.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2011. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.