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About half of the slowdown in trade growth since the financial
crisis can be explained by weak economic activity, Bank of
Canada Governor Stephen Poloz said. Policy makers also need to
consider whether the rapid trade growth seen in the 1990s and
2000s was an exception rather than the rule.
"The weakness in trade we've seen is not a warning of an
impending recession," Poloz said in prepared remarks of a speech
in New York.
"Rather, I see it as a sign that trade has reached a new balance
point in the global economy - and one that we have the ability
to nudge forward," he added, saying the slowdown in China as the
economy transitions away from trade also weighed on the outlook
for global trade.
Poloz also cited the "severe headwinds" still at play in the
global economy, saying most experts agreed that a sudden return
of interest rates to 3 or 4 percent would trigger a recession.
(Reporting by Leah Schnurr and David Ljunggren; Reuters Ottawa
Bureau)
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