The Canadian economy received a glowing review from the International Monetary Fund (IMF), who said the country is expected to lead the G7 pack for growth this year.
The IMF released its latest world economic outlook update, showing a positive outlook for Canada and a shakier economic forecast for the United States.
It now expects the Canadian economy to grow by 2.5 per cent in 2017, up from its April projection of 1.9 per cent.
“The Bank of Canada is actually predicting a 2.9 per cent growth,” Bank of Montreal economist Doug Porter said. “The IMF outlook may actually be a bit modest.”
The IMF said it revised its 2017 outlook for Canada following strong growth in the first quarter and indications of “resilient second-quarter activity.”
Canada has had strong population growth, more jobs, and oil prices have stabilized, Porter said.
On Monday, Canada’s dollar climbed over 80 cents U.S., for the first time in two years, signalling more growth.
WATCH: Is the Bank of Canada’s interest rate increase worth worrying about?
U.S. economy takes a hit
The IMF lowered its economic growth forecasts for the U.S. to 2.1 per cent for 2017 and 2018. That’s down from the 2.3 per cent for 2017, and 2.5 per cent for 2018 that it had predicted in April.
U.S. President Donald Trump’s failure to push through his promised corporate tax cuts and other pro-business legislation has hindered U.S. growth prospects, according to the outlook.
The outlook also said the world is relying less than expected on the U.S. and the United Kingdom, and more on China, Japan, Europe and Canada.
But the view has changed, he said.
“The U.S. economy has slowed and there is less enthusiasm coming out of the dollar,” he said.
WATCH: How Trump’s presidency could effect the Canadian economy
The outlook for Canada in 2018 is not as rosy, and is down a notch from the 2 per cent growth it predicted in the spring.
On the whole, the IMF left its forecast for worldwide economic growth at 3.5 per cent.
Comments