IMF Praises Canada’s Prudence and Response to Financial Crisis

(CEP News – Megan Ainscow)

The International Monetary Fund said Wednesday that while Canada faces tough times ahead, sound government fiscal policy and a stable banking system have made the country one of the best-equipped to weather the global recession.

The statement by IMF Mission Chief Charles Kramer following his visit to Canada said the government has managed its budget well over the last 10 years, cutting the federal debt in half, which “has left the country in prime form at the beginning of the global turmoil.”

He said official response to the crisis – namely the fiscal package announced in January – was well-timed and well-planned. He also praised the Bank of Canada, which has cut its target rate by 400 basis points since December 2007 to a record low of 0.5%.

Looking ahead, “the authorities have expanded their toolbox for dealing with the possible emergence of more severe financial strains. These tools include capital injections and other policy measures that, while not needed now, are prudently being developed should the need arise,” he said. Read more here.