Stephen Harper says investors are allowing themselves to be unduly rattled by the plunging stock markets.
In Brazil’s business capital for a trade mission, the prime minister said the dropping stock indexes are important but they can also be a distraction.
“We're all watching with great interest and some trepidation the volatility in the international markets. These are not things without consequence,” Mr. Harper told a meeting of business leaders in Sao Paulo.
“We put too much emphasis on this stuff,” he said. “You know, it's way too easy to focus on the trillions that seem to be made or lost in movements on markets.”
He told his audience that policy makers and business leaders should focus on “fundamentals” and “a clear, long-term strategy to create jobs and wealth.”
“What really matters is what we are doing here and that is focusing on mid-term and longer-term opportunities to create wealth, to create trade, to create enterprise, to create jobs ... That is what is really important.”
Mr. Harper, who has already tried to calm Canadian fears over market plunges, made the comments in advance of a keynote Tuesday address on Canada-Brazil relations.
The prime minister, in Brazil to deepen ties with the world’s seventh largest economy, tried to reassure Canadians Monday after stock markets on Bay Street and Wall Street plunged in the aftermath of the downgrade of the heavily-indebted U.S. government’s credit rating.
“To date, this doesn’t change our overall assessment. Notwithstanding the fragility of the economy and the headwinds that are there, we believe that a gradual recovery can continue,” Mr. Harper said Monday.
“We remain optimistic that with the right policy mix, with all of us throughout the G7 working together, acting cautiously and prudently -- and together and in ways that don’t create crises -- that we can continue to see a slow rebound of the economy.”
His comments followed a televised address by Barack Obama where the U.S. president said political dysfunction was to blame for the move. He said S&P downgraded the U.S. rating “not so much because they doubt our ability to pay our debt” but that it “doubted our political system’s ability to act.”
On Monday, Mr. Harper said he wasn’t ignoring the panic on the stock exchanges, where the scale of losses in recent weeks prompted fears of a selloff like the kind that occurred during the 2008 financial crises. The prime minister however said the events of the past few weeks do not change his forecast.
“I’ve said all along there are going to be bumps along the way. Obviously in the last few days there has been significant turmoil in the markets. I am not discounting that. It is something we watch very carefully,” he said Monday.