Canada Carney sees stimulus easing recession

By Louise Egan

SAO PAULO (Reuters) - Fiscal stimulus measures taken around the world could soften a global recession but investors should not expect an imminent round of coordinated interest rate cuts, Bank of Canada Governor Mark Carney said on Sunday.

After meeting with G20 central bankers and finance ministers in Sao Paulo, Brazil, Carney told Reuters he was confident that governments in some emerging market economies and more than one industrialized economy would soon be announcing new steps to boost growth.

"The sum of that could start to be significant," he said in an interview.

"What I heard, in terms of understanding the situation and of the policy intent, suggests there's significant enough policy that could be forthcoming to reduce the depth of that recession," he said.

In its last forecast in October, the Canadian central bank projected a global recession in 2009 and said the Canadian economy would grow by about 0.6 percent.

That domestic growth forecast is now looking overly optimistic, Carney hinted, but said the expected increase in demand for commodities and other goods from China and other growing economies could offset any downward revision.

"We're updating our view in December on the depth of the global slowdown and what it means for Canada ... There's a bit of an offset (from the stimulus) so we'll see whether that nets out to positive or negative," he said.

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