IMF’s Charles Kramer about Canada Recovery

The IMF is going to release it’s ‘Article IV’ report early next month, and Charles Kramer (IMF Mission Chief) and Marcello Estevao (his “Deputy in the IMF’s North America Division”) did a conference call to share the main findings.

Here’s the three main findings (emphasis is mine).

The bottom line is that Canada is positioned quite well, and there are three reasons why.

First, Canada has a track record of sound macroeconomic policies. In the run-up to the crisis, Canada ran eleven straight years of fiscal surpluses, which has given it the lowest net debt to GDP ratio in the G-7.It has also maintained price stability through a sound monetary framework. So it entered the crisis from a strong position.

Second, Canada has responded proactively to the crisis. It has launched a strong and well-timed fiscal stimulus, and the Bank of Canada has substantially used monetary policy, both of which will support demand.

Third, Canada has maintained and preserved financial stability. Banks are strongly regulated and conservative by nature, so they have avoided the toxic assets we have seen in other banking systems. Thanks to this, they have not needed public rescues as in so many other countries. This is especially important because macroeconomic policy is far more effective when the banking system is functioning well.

You can also read his concluding statement here.

Hat-tip to @qmanrei.

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