Carney Says Canadian Economy Almost Back to Full Capacity

Bank of Canada Governor Mark Carney said the nation’s economy is almost back to its full capacity, and reiterated that higher interest rates may become appropriate.

Carney, speaking in an interview with the Canadian Broadcasting Corp., said the country’s underlying inflation rate has firmed in the last several months and the central bank expects the economy to grow at “above trend” rates in 2012 and 2013.

“It’s in that environment -- that given the fact that rates are exceptionally low, there is considerable monetary stimulus -- that we have signaled that if this continues, in light of the situation, some modest withdrawal of that considerable monetary stimulus may become appropriate,” Carney said, adding that would be a decision the central bank would weigh carefully.

To contact the reporter on this story: Theophilos Argitis in Ottawa at targitis@bloomberg.net

To contact the editor responsible for this story: Paul Badertscher at pbadertscher@bloomberg.net