TORONTO (AP) -- The Canadian economy is deteriorating faster than projected and short-term interest rates may need to be cut again in an effort to boost activity, Bank of Canada governor Mark Carney said Wednesday.Carney signaled that the central bank may reduce short-term interest rates again on Dec. 9.
"Despite having already cut official interest rates in half over the past year and having a financial sector that is still functioning effectively, some further monetary stimulus will likely be required to achieve the inflation target over the medium term," he said in notes from a speech delivered to a business audience in London, England.
Carney did not predict Canada would fall into a recession, defined as two consecutive negative quarters of growth. But he said the economy was weaker than the central bank's projections last month when it forecast a fourth-quarter contraction and meager 0.6 percent growth in 2009.
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