Global Economic Recovery on the Horizon.

The recent terrorist attacks in the United States will delay a global economic recovery another six months, according to Vice-President and Chief Economist of the Export Development Corporation Stephen Poloz.

"The world economy was just starting to recover from the "tech wreck" of last year when the terrible tragedies hit the U.S.," said Poloz, who was a keynote speaker at the Saskatchewan Trade and Export Partnership's Growing Locally, Succeeding Globally 2001 conference hosted in Regina.

"After those terrible events it really is hard to predict what will happen next. Most likely recovery will be delayed until people digest just exactly what has happened."

Speaking to a crowd of close to 300, Poloz said the global economy was entering the upside of a lazy "U", until the tragic events of September 11.

"In the spring of 2000 the economy was as good as it gets and growing too fast, which triggered Alan Greenspan to deliberately cause a slow down by lowering interest rates in the U.S.," said Poloz, who holds a Doctorate degree in Economics from Western Ontario University. "Emerging from that deliberate slow down and the global tech hangover, the economies of most countries were just starting to improve. But, when you add uncertainty like what the States has just faced everything is left up in the air.

Coupling the events in Washington and New York with a recession in Japan, tech trauma still being felt in Asia, the central bank in Europe being slow to react and financial tensions in Turkey and Argentina, and the global economy is back on shaky ground. However, Poloz says there are still positive signs that shouldn't be overlooked.

"The economies of China and India have held up quite well during this latest downturn, and although Japan is likely going to get worse before it gets better, new political leadership looks promising for that economy," said Poloz. "Europe should continue holding steady and the IMF has placed a high level of commitment on assisting Turkey and Argentina."

As for Canada's economy, Poloz said 2001 was shaping up as a mixed year with strong gains made in the energy and consumer goods sectors, while the telecom and forestry sectors saw decreased business. In Saskatchewan, he said exports are down six per cent from last year due mainly to lower oil prices.

"The oil, potash, wood pulp and wheat sectors have been soft in the province, while canola, barley, uranium and beef have all picked up considerably," said Poloz. "Continuing to build on those strengths and improving some of the softer ones will be key to Saskatchewan's continued recovery."

Although very difficult to predict given the events south of the border, Poloz said the future of the global economy is not in dire straits. He predicts 2002 will see modest improvements in many economies, as the world adjusts to the new realities it has been faced with.

"I expect that a year from now we will look back on today with some relief. I am confident that the resiliency of our neighbours to the south will prevail over these terrorist acts and that resiliency will be reflected in economies across the world," said Poloz. "Tragedy usually brings people closer together and I am optimistic that will be mirrored in the global economy."