* Canada PM will stick to plans to cut budget
* Harper says deficit on track despite rosy data
By David Ljunggren, Janet Guttsman and Randall Palmer
OTTAWA, Feb 3 (Reuters) - Canada’s government does not see much sign of a recession or a crisis in the Canadian economy this year, and is expecting slow but steady growth, Prime Minister Stephen Harper said on Friday.
Harper, speaking in an interview with Reuters, also said his government would stick to plans to reduce government spending despite signs the economy was slowing and the budget deficit might be smaller than expected.
“I don’t see a lot of evidence that we’ll have a recession or a crisis this year, but on the other hand I don’t want to be too complacent about that,” Harper said, citing problems in Europe and United States that he described as a significant drag on the Canadian economy.
After showing surprising resilience for much of 2011, there are clear signs the economy is slowing down. Only 2,300 new jobs were created in January, much lower than the 23,100 the market had expected.
“I‘m disappointed with today’s job numbers but encouraged by the fact we’re finally seeing some job growth in the United States, which our labor market also has needed,” said Harper. The United States, by far Canada’s biggest trading partner, posted unexpectedly strong jobs number on Friday.
Harper’s Conservatives are under pressure from opposition parties to put off planned spending cuts that the government says are necessary to eliminate the budget deficit by the 2015-16 fiscal year.
Harper said the cuts would amount to no more than 1 or 2 percent of government spending, and they would go ahead.
He also played down data which suggested the 2011-12 federal budget deficit would be less than the predicted C$31 billion ($31.3 billion). The deficit from April to November was C$17.34 billion.
“Interim data after eight months is not necessarily a good predictor of the year. Our assessment is still that the budget track is pretty close ... to what we’ve laid out in the last budget,” he said.
“Given we expect to see steady growth, slow but steady growth of the Canadian economy, the appropriate path is the path we’re on.”
Harper reiterated that he would be flexible if he saw signs of another recession or serious crisis.
“The long-term prospect for the West is quite frankly pretty slow growth going forward. I don’t think that has to be Canada’s future,” he continued. The government is promising unspecified aggressive actions to boost Canada’s competitiveness.