Global economy weakening, but Canada continues with slow growth: IMF forecasts

OTTAWA – The International Monetary Fund expects Canada’s economy will grow by 2.1 per cent this year and 2.2 per cent next year — better than many other industrialized countries.

That’s below the Bank of Canada’s previous estimate of 2.4 per cent growth in both years, but the central bank is expected to revise downward that forecast Tuesday at a scheduled interest rate announcement.

In a new global outlook, the IMF is calling on many economies to step up their policy responses to what they say are signs of further weakness.

It calls on Europe to implement bank bailout measures they’ve introduced and to take steps toward further banking and fiscal union.

The United States, it says, must avoid at all costs a fiscal cliff where stimulus is abruptly withdrawn, and promptly raise the debt ceiling to avoid of a repeat of last August’s manufactured crisis.

Amid this uncertainty and turmoil, the IMF sees Canada’s economy doing surprisingly well.