Canadian Economic Growth Slashed, Along With Rest Of World, In IMF Report

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TORONTO — The International Monetary Fund is lowering its economic growth projections for Canada and the world.

Slowing growth in global oil exports, low crude prices and weak demand for non-oil commodities were identified as factors.

The IMF is now projecting Canada's economy to grow by 1.5 per cent this year and by 1.9 per cent next year.

christine lagarde

IMF Managing Director Christine Lagarde. The IMF is lowering its economic growth projections for Canada and the world. (Flavio Bini/La Presse)

That would be an improvement on last year's growth of 1.2 per cent but less than the IMF's January estimate, which projected Canada's economy would grow 1.7 per cent in 2016 and 2.1 per cent in 2017.

The IMF is also lowering its estimates for the United States and the global economy overall, with China being an exception.

It's now estimating China's economy will grow 6.5 per cent this year and 6.2 per cent in 2017, up 0.2 percentage points in each year from previous IMF forecasts.

The international body repeated a recent warning that the world's economic growth remains too slow and too fragile, increasing the risk of social and political stress in many countries.

global trade manufacturing

Global trade and manufacturing are seeing a downward trend, this chart from the IMF shows.

The revised outlook is being released as the IMF begins its spring meetings in Washington, D.C. Finance ministers and central bank governors from the G20 countries are also scheduled to hold meetings alongside the IMF.

In addition, the Bank of Canada will provide an update Wednesday on its key interest rate, currently at 0.5 per cent, and an assessment of the Canadian economy.

In January, the central bank estimated Canada's economy would grow by 1.4 per cent in 2016 — down from its fall forecast of 2.0 per cent — and projected 2017 growth would be 2.4 per cent.

Finance Minister Bill Morneau's first federal budget, released on March 22, uses a private-sector estimate of 1.4 per cent GDP growth in 2016 and 2.2 per cent in 2017.

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