IMF Slashes Canada Growth Outlooks and Warns US, Europe

This article was last updated on April 16, 2022

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IMF, the International Monetary Fund has slashed its growth predictions for Canada for 2011. IMF says the global economy is in a risky place.

“Global activity has weakened and become more uneven, confidence has fallen sharply recently, and downside risks are growing,” says IMF.

The IMF cuts its 2011 growth estimates for Canada to 2.1 per cent, dropped by 0.8 of a percentage point from its June 2011 outlook. For 2012, growth in Canada is likely to reduce to 1.9 per cent, dropped by 0.7 of a percentage point from the IMF’s summer outlook.

IMF chief economist Olivier Blanchard says, “There is a wide perception that policymakers are one step behind markets. Europe must get its act together”

The reduction to the Canadian outlook came as the IMF axed its growth predictions for the world’s developed economies including the United States, the euro zone area and Japan, to an “anemic” 1.6 per cent this year from the previous prediction of 2.2 per cent.

Blanchard added, “Strong policies are urgently needed to improve the outlook and to reduce the risks. Only if governments move decisively on fiscal policy, financial repairs, and external rebalancing, can we hope for stronger and more robust recovery.”

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