The IMF says Canada not only faces headwinds from the global economy, but also challenges from record-high household debt and an overheated housing market.
The Washington-based monitor of the global economy says Canada's house prices are about 10 per cent above fundamentals, and more so in some areas.
A 15 per cent correction in prices could cut 1.5 per cent from private consumption, the IMF says, damaging the economy.
For the nation as a whole, the IMF says Canada's economy likely grew by 2.2 per cent this year and will expand a further 1.9 per cent next year.
That is close to the Bank of Canada's projections for growth.
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