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Bank of Canada has ruled out a double-dip recession in the US.
The recent downgrade of US's sovereign rating and weak economic data had increased the fear of double-dip recession, which has affected world market.
“We are not looking any double-dip in the US. We are looking at modest growth, ” the Senior Deputy Governor, Bank of Canada, Mr Tiff Maclem, told Business Line . “Though some recent economic data in the US suggest weaker growth, it does not mean a decline.”
Recent events in the US also intensified the debate on replacing the dollar from International Reserve Currency. But Mr Maclem thinks otherwise. “It is fair to say that the dollar will be reserve currency for some time to come. These things (changing international reserve currency) do not happen quickly and I don't think there is a clear alternative to the dollar.”
Mr Maclem said that India along with Canada would be able to attract more money. But, “there are challenges. We have to make sure that these capital flows go for productive purposes,” he said.
Commodity prices worldwide are high. The US downgrade and the financial crisis have also fuelled that. Though crude prices are down, Mr Maclem said that it will not remain so. “With strong growth of the middle class in India and other emerging markets, the demand for food will continue. Sustained growth requires demand for energy. The strong demand from construction and infrastructure will further support commodity prices.”
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