UPDATE 1-G20 should strengthen recovery to deal with disinflation -Canada

Wed Apr 9, 2014 4:53pm EDT

Related Topics

(Adds comments on Ukraine, China, income inequality, background)

OTTAWA, April 9 (Reuters) - Canada believes that strengthening the global recovery is a key way to deal with risk of too low inflation in Europe and elsewhere, a senior government finance official said on Wednesday ahead of G20 meetings in Washington.

Low inflation globally and particularly in Europe reflects the weak external economic environment facing Canada, and Canada will look for what the G20, the Group of 20 leading economies, will do to strengthening the global economy, the official told reporters on condition of anonymity.

The International Monetary Fund repeated warnings on Tuesday about the very low level of inflation in the euro zone and called on the European Central Bank to ease monetary policy.

Canada sees work on the recovery as going hand in hand with avoiding disinflation or inflation that is too low, the Canadian official said. Ottawa is also looking at what is behind low Canadian inflation as well, he added.

As part of the overall global discussions, the G20 will also look at financial developments that have stemmed from instability in Ukraine and Russia, but Canada wants to make sure the G20 keeps its eye on global growth strategies.

Risks surrounding the slowdown in Chinese growth are among several risks the G20 will consider, he added.

Asked about income inequality, he said the G20's employment task force would be discussing it among numerous challenges. (Reporting by Randall Palmer and Louise Egan; Editing by James Dalgleish)

FILED UNDER: