Canada鈥檚 economy saw 鈥渕odest鈥� growth during the most recent fiscal period but international fiscal concerns continue to threaten the country鈥檚 recovery, Finance Minister Jim Flaherty said Friday.
The Canadian economy grew at an annual rate of 1.8 per cent in the last quarter, according to Statistics Canada numbers released Friday. That level of growth was the best among G7 nations.
Flaherty told a press conference on Friday that while Canada鈥檚 economic recovery was on track, the global economic situation remained fragile, especially for some of Canada鈥檚 key trading partners, specifically the U.S. and European nations.
鈥淭hese data show that Canada is continuing to show positive growth. We have now witnessed four straight quarters of economic growth. While the growth is modest, it reinforces Canada鈥檚 positive economic track relative to other countries,鈥� Flaherty told reporters.
The finance department also announced Friday that the budget deficit shrank from $2.3 billion in June 2011 to $1.1 billion in June 2012.
Flaherty warned, however, that economic instability still loomed on the world stage.
Data released by the European Union on Friday suggests the region鈥檚 economic woes have not dissipated and its 11.3 per cent unemployment rate is the highest since the Euro was established in 1999.
Should the region鈥檚 economic troubles threaten Canada, Flaherty said, stimulus money was not out of the question.
"What has been done before can be done again," Flaherty said on the topic of stimulus spending.
"If we ran into a serious world economic crisis arising out of the European situation, or something else ... then of course we'd be responsive if we had to be, to protect the Canadian economy and protect Canadian jobs as we have done in the past."
The federal government used a $50-billion stimulus plan to create jobs and cushion the economy coming out of the 2008 recession. The strategy included tax cuts, income support and infrastructure projects to limit the effect of the worldwide economic crisis.
Canada still lost about 430,000 jobs before pulling itself out of a nine-month recession.
U.S. Federal Reserve Chairman Ben Bernake said on Friday that that country鈥檚 economic recovery remained 鈥渇ar from satisfactory鈥� and suggested stimulus action could be taken to improve the job market.
Douglas Porter, deputy chief economist at BMO Capital Markets, said Canada鈥檚 modest GDP growth was "nothing to write home about."
"The economy is essentially growing right in line with the U.S. now and is still rising below potential," Porter wrote in a note to clients, according to The Canadian Press.
Statistics Canada credited business investment for the improvements to the economy from April to June, when the private sector grew by 9.4 per cent.
鈥淧rivate sector business investment is key to laying the foundation for a sustained, long-term expansion of Canada鈥檚 economy and job growth,鈥� Flaherty said.
