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IMF cuts Canada’s growth estimates for 2016-17

Part of global trend marked by slowing global oil exports, low crude prices and weak demand for commodities.


TORONTO — The International Monetary Fund is lowering its economic growth projections for Canada and the world.

Slowing growth in global oil exports, low crude prices and weak demand for non-oil commodities were identified as factors.

The IMF is now projecting Canada’s economy to grow by 1.5% this year and by 1.9% next year.

That would be an improvement on last year’s growth of 1.2% but less than the IMF’s January estimate, which projected Canada’s economy would grow 1.7% in 2016 and 2.1% in 2017.

The IMF is also lowering its estimates for the United States and the global economy overall, with China being an exception.

It’s now estimating China’s economy will grow 6.5% this year and 6.2% in 2017, up 0.2 percentage points in each year from previous IMF forecasts.

The international body repeated a recent warning that the world’s economic growth remains too slow and too fragile, increasing the risk of social and political stress in many countries.

The revised outlook is being released as the IMF begins its spring meetings in Washington, DC. Finance ministers and central bank governors from the G20 countries are also scheduled to hold meetings alongside the IMF.

In addition, the Bank of Canada will provide an update on its key interest rate, currently at 0.5%, and an assessment of the Canadian economy.

In January, the central bank estimated Canada’s economy would grow by 1.4% in 2016 – down from its fall forecast of 2% – and projected 2017 growth would be 2.4%.

Finance Minister Bill Morneau’s first federal budget, released on March 22, uses a private-sector estimate of 1.4% GDP growth in 2016 and 2.2% in 2017.

© 2016 The Canadian Press

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