The Canadian economy is visibly slowing but is not heading into a recession, Finance Minister Paul Martin said yesterday.
Martin downplayed the likelihood of any collective action by the G-7 industrial countries to stem the general slowdown in their economies.
''I think the slowdown would have ocurred . . . simply because we could not continue at the pace that most of our economies - certainly in North America - grew last year,'' Martin told reporters.
Martin said the slowdown was anticipated by the G-7 leaders as economies moved from high growth rates to a more sustainable level.
''The only difference is that it has occurred a little earlier than when we expected,'' Martin said.
The slowdown in Canada, however, is not a prelude to recession, he said.
''There has been a slowdown in the first and second quarters - no doubt about it. I think most of us expect a recovery and expect a recovery this year,'' he said.
However, Royal Bank chief economist John McCallum said he expects second quarter growth numbers to be negative.
''The risk of recession is higher than before - we may be in one now,'' McCallum told The Post.
''I think the second quarter is quite likely to be negative. We're expecting an improvement in the second part of the year but it's not certain.''
In downplaying the possibility of G-7 collective action to stimulate growth, Martin said the industrial countries basically believe it is up to each country to manage its own economy in a manner that provides stability of exchange rates.
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