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Economy sees modest growth, new forecasts coming

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The Canadian economy should grow modestly and the budget deficit should gradually be eliminated, Finance Minister Jim Flaherty said on Monday after a meeting with private-sector economists, though he did not release consensus growth figures.

The economists will draw up new growth forecasts in light of better than expected fourth-quarter growth figures that were released on Friday, he said, and therefore he did not release a consensus of forecasts after the meeting.

"The economists noted that the Canadian economy has been resilient over the last year and Canada will continue to see modest growth going forward," he told reporters at the Finance Department.

"We're going to follow up with the economists because the numbers last Friday were relatively encouraging ... so we agreed this morning we would follow up with them this week. We try to be as 'au courant' (up to date) as possible when we do the budget in terms of the prognostications."

Ottawa periodically consults private sector economists and uses their average forecasts in its fiscal planning. When Flaherty gets the new forecasts, he will feed them into the 2012 federal budget, to be introduced on March 29.

In contrast to the United States, the housing market in Canada has been robust, but Flaherty stopped short of signaling any new restrictions on mortgages.

"There has been some moderation in the housing market. I remain concerned about the condo market, quite frankly," he said.

"Interest rates are relatively low, so I again encourage Canadians to be careful in the amount of debt they take on in terms of residential mortgages because rates will go up some day and I would not want people to get caught."

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