Canada's Economic Growth To Remain Solid In 2015-2016 Albeit Low – IMF

Canada will post an economic growth of only 2.2 percent in 2015 and 2.0 percent in 2016, the International Monetary Fund said in its spring World Economic Outlook released on Tuesday. The downturn is brought about by the impacts of lower oil prices, it said.

While it described Canada's recent performance as "solid," IMF said the unusually large drop in oil prices risks the country’s growth to a much larger extent because even if exports continue to rise, there remains the weaker business investment in the energy sector and unimpressive employment opportunities.

The “stronger” U.S. recovery coupled with the fall of the Canadian dollar have helped translate to a pickup in exports, but have yet to translate into strong investment and hiring, it said. These developments meant Canada will be able to escape recession, the Canadian Press reports.

Ongoing government fiscal consolidation, aided by the continued low interest rates from the Bank of Canada, “would be conducive to rebalancing growth away from household consumption and toward business investment to generate a broader, more durable recovery,” the IMF said.

In the same report, IMF revealed the North Sea oil producers will be the ones most hurt of the global oil price collapse. "Canada, the North Sea, and the United Kingdom are among the most expensive places to operate oil fields,” the IMF said. As a result, the oil price slump will affect production in those locations earlier and more intensely than in other locations, such as Kuwait, Iraq and Saudi Arabia.

On a global note, the world economy will jump to 3.5 percent in 2015, from 3.4 percent in 2013, IMF projected. The outlook for global economic growth in 2016 will be 3.8 percent.

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