The International Monetary Fund has slightly trimmed its forecast for Canadian economic growth, citing the continued downside risks posed by the oil shock.
In its spring World Economic Outlook, the IMF forecast that Canada’s real gross domestic product will grow by 2.2% this year and 2% next year. Both projections are down by 0.1 percentage points from the financial institution’s previous forecast, issued in January.
The IMF said continued low interest rates from the Bank of Canada, together with further government fiscal consolidation, "would be conducive to re-balancing growth away from household consumption and toward business investment to generate a broader, more durable recovery."
It also recommended that "targeted macroprudential policies would help address high housing sector vulnerabilities."
The IMF predicts that the global economy will grow by 3.5% this year, unchanged from its January forecast, and up only slightly from 2014’s growth of 3.4%. It said growth prospects for advanced economies have generally improved over last year, but it expects slower growth in emerging and developing markets, "primarily reflecting weaker prospects for some large emerging-market economies and oil-exporting countries."
