Reuters reported that Mr Jim Flaherty finance minister of Canada played down concerns about the depth of the country’s recession, saying that it would be relatively mild and that Canadians were not worried about the exact pace of the slowdown.

Mr Flaherty predicted at the time of his budget in January that the economy would shrink by 0.8%in 2009, an estimate now viewed as too optimistic by forecasters such as the OECD, which predicted a 3% decline earlier this week.

He added that "I think we are certainly looking at negative growth. I don't think Canadians are that concerned if its 2 point this or 1 point that. What they are concerned about is the government taking the necessary steps to ease the impact on those who will lose their jobs."

In his speech to the UK Canada Chamber of Commerce, Mr Flaherty stressed that Canada was well placed to recover swiftly and that the recession was not severe, even if Canada would face a difficult year and it was too soon to say if the worst was past. He added that "Relatively speaking this is a mild economic recession. We will come out of this strongly. We are able to withstand this."

While the Bank of Canada had softened its tone on following the United States and Britain in embarking on a policy of asset purchases to reflate the economy, Mr Flaherty was cautious about the inflation implications. He said that "The sense among finance ministers in the past 18 months is that we need to do what we need to do now, and worry about inflation later. In Canada we are conscious of that."

(Sourced from www.reuters.com)