"Canadian Finance Minister has concerns over U.S struggling economy ..."

"The United States is still struggling, and that's a major worry for the Canadian economy..."

Canada, this year's chair of the G7 group of industrialized nations, has weathered the global financial crisis better than most of its peers but it is very exposed to a faltering recovery in the United States, which buys most its exports.

"The United States is still struggling, and that's a major worry for the Canadian economy," Mr. Flaherty told a business lunch while on a visit to Ireland. He cited weak consumer demand and persistent unemployment as some of the main concerns in the United States.

In Canada, Mr. Flaherty said growth in gross domestic product probably moderated in the second quarter of 2010 from the first quarter or in the last three months of 2009.

"That was relatively extraordinary growth [in previous quarters], higher than we had anticipated," he told journalists. "So we do expect, as the IMF does, more moderate growth for the balance of this year and into 2011," he added.

Canada is due to release second quarter gross domestic product data next week.

Asked if worries about the struggling U.S. economy would make him revise plans to exit a stimulus program, Mr. Flaherty said: "We'll just stay on track, complete the economic action plan, it's working."

He added there were also some positive signs in the U.S. economy and developed nations on the whole could look forward to moderate growth in coming years.

"We have to be carefully monitoring ... to make sure we don't slide backwards into any sort of double dip [globally]," he told the lunch after an expose on his own Irish ancestry.

Earlier yesterday, Mr. Flaherty came to Ireland's defence, saying it had a solid bank plan and was Europe's leader in fiscal reform. The views of rating agencies, such as S&P's downgrade of Ireland this week, should not be taken too seriously, he said.

Purchases rose 0.4 percent, the most since March, after little change the prior month, Commerce Department figures showed today in Washington. Incomes climbed 0.2 percent, less than projected, and the savings rate dropped. 

The country’s seventh consecutive current account shortfall was larger than the the $10.7-billion deficit analysts had predicted in a Reuters poll and represented a deterioration from the revised first-quarter deficit of $8.46-billion.

Statscan revised its first-quarter figure from an initial estimate of a $7.82-billion deficit.

Canada’s balance of trade in goods returned to a deficit in the second quarter after two quarters of surplus, as shipments of energy products and industrial goods declined and the country’s trade surplus shrank with its top market, the United States.

The deficit in trade in services widened however, pushed up primarily by Canadian travelers spending more abroad, while foreign spending on services inside the country declined.

This was partially offset by a reduced investment income deficit as a result of bigger profits by Canadian direct investors abroad, while returns for foreign investors in Canada fell.

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