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IMF Foresees Global Economy Accelerating

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WASHINGTON — The International Monetary Fund projects moderate economic growth for Canada this year and next, albeit at a rate lower than last year's and significantly slower than in the United States.

In a document generally positive about the current global economy, but flashing warning signs of potential trouble ahead, Tuesday's IMF World Economic Outlook foresees growth in Canada of 2.1 per cent this year and two per cent next year.

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That represents a downgrade from January's outlook of 2.3 per cent growth forecast for this year, and it's less than the strong three per cent growth Canada experienced in 2017.

It's also less optimistic than the forecast for the U.S.: the United States is projected to grow almost three per cent this year, which is a significant improvement from recent IMF outlooks.

"They're very closely aligned with our forecasts," said Brett House, the deputy chief economist at Scotiabank, where the prediction for Canada is one-tenth of a percentage point higher than what the IMF projects.

"Very, very close to our numbers."

The broader document is generally optimistic about this year's global prospects, with worldwide growth being on an upswing and a larger-than-previous forecast of a 3.9 per cent increase for 2018.

Yet it warns of looming worries — potential trade wars; rising interest rates; heavy spending in certain countries, including the U.S., which could leave little fiscal space for the next downturn; and insufficient worker skills to deal with technological changes.

"Favourable conditions will not last forever," IMF economic counsellor Maurice Obstfeld wrote.

"Now is the moment to get ready for leaner times."


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Source : https://www.therecord.com/news-story/8400782-imf-canadian-economy-should-still-grow-in-2018-just-a-little-less/

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