The International Monetary Fund is downgrading prospects for Canada and other advanced countries as the global economy enters a dangerous new phase.
OTTAWA: The International Monetary Fund is downgrading prospects for Canada and other advanced countries as the global economy enters a dangerous new phase.
The Washington-based IMF’s new outlook says Canada’s economy will remain positive but this year’s growth rate will be 2.1%, falling to 1.9% next year.
TD Economics is forecasting similar growth for 2011 at 2.2%, and 1.9% next year. RBC Economics was more optimistic with growth projection of 2.4% this year and 2.5% next year.
All of these are down from previous forecasts and the official Bank of Canada expectations, which are 2.8% this year and 2.6% in 2012.
A recent TD Economics report noted Canada’s fortunes as a small open economy remain closely tied to developments abroad, so slow growth in the US, Europe’s ongoing debt crisis and financial-market jitters will likely “significantly constrain” Canada’s rate of expansion over the next several quarters.
The IMF also projects Canada’s unemployment rate will rise from the current 7.3% to the mid-seven per cent range and above.
It says the overall global economy will grow 4% this year and next year – down from 5.1% last year.
The IMF is not predicting a global recession but it’s warning that risks of a downturn have dramatically worsened due to Europe’s sovereign debt crisis.
Click here for more information related to the IMF report.
The Canadian Press, Files from PLANT