Canada's finance minister denied Friday that the country is heading for recession, a day after two major banks predicted economic doomsday.

Canada, the world's fifth-biggest oil producer, has been hard hit by tumbling global oil prices and its economy shrank 0.6 percent at an annualized rate in the first quarter.

On Thursday, Nomura bank said it expected Gross Domestic Product to contract 0.5 percent in the second quarter, while Bank of America Merrill Lynch said a 0.6 percent decline in that period was likely.

A recession is defined as two consecutive quarters of contraction.

But Finance Minister Joe Oliver said: "We're not in a recession... We don't believe we will be in a recession."

Despite the bleak outlook of the banks, Oliver said he expects growth in the second quarter and beyond to be robust.

"We expect solid growth for the year, following a weak first quarter," he said.

A recession could put the Conservative government, in power since 2006, in bad standing ahead of general elections in October.

Second quarter GDP estimates are expected after the central bank's next meeting, which takes place on July 15. Final figures are expected to be confirmed in September.
Source: AFP