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Slowing economy worries Flaherty

Finance Minister Jim Flaherty says Canada is apprehensive about the slowing and uneven pace of global recovery despite having weathered the recession relatively well.

Finance Minister Jim Flaherty says Canada is apprehensive about the slowing and uneven pace of global recovery despite having weathered the recession relatively well.

He says it’s essential the G20 follow through in implementing its package of global reforms and work hard to ensure the world economy remains on “a sustainable path.” Flaherty also warned that demand in advanced economies is expected to be subdued as consumer and investor confidence remains weak due to rising unemployment, uncertainty in financial markets and concerns over fiscal sustainability.

On Saturday, the G20 countries vowed to avoid potentially debilitating currency devaluations, aiming to quell trade tensions that could threaten the global recovery.

The agreement came amid fears that countries were on the verge of a so-called currency war in which they would devalue currencies to gain an export advantage over competitors — causing a rise in protectionism and damaging the global economy.

The agreement, though vague on enforcement and long on promises, was hailed by officials and analysts as a step forward in defusing tensions.

Still, it could turn out to be nothing more than a symbolic handshake unless the disparate forum that has become the board of directors for the global economy can act on its words and build a viable enforcement mechanism.

 
 
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