Canada to grow 1.9% in 2012, IMF says
Canada's economy will grow 2.2 per cent this year and 1.9 per cent in 2012, the International Monetary Fund said Thursday.
"While Canada’s medium-term outlook remains broadly favorable, near-term downside risks are high due to the financial market turmoil in Europe and rising household indebtedness," the IMF said in a public information notice.
External threats are the main risk, while household debt and high house prices are the main domestic concern.
Business investment is expected "to play a key role in sustaining growth." Government and consumer spending are slowing down, but "business investment remains buoyant reflecting low funding costs, cheaper imports of capital goods, and elevated commodity prices."
The IMF directors like the moves to end the stimulus programs that the federal and provincial governments launched in the recessions, and endorsed the move to balanced budgets. But if there is another downturn, "there is space for countercyclical fiscal support … given the low level of government net debt."
The IMF growth forecast is close to the forecasts of the big Canadian banks.
It's also similar to an Oct. 31 IMF report, which called for growth of about two per cent in both years.