IMF: Canadian economy to grow, slightly, by 2.2 per cent in 2014

WASHINGTON – The International Monetary Fund expects the Canadian economy to improve in 2014, albeit very slightly.

The organization has released a projection that Canada’s economy will grow 2.2 per cent this year, up from an estimated 1.7 per cent in 2013.

That’s despite historic household debt-to-income levels, a cooling housing market, and continued risks in the U.S. and Europe that could impact Canadian exports.

The IMF also notes that the lower loonie hasn’t managed yet to spur non-energy exports to levels reached after past recessions. It concludes that the sluggish exports are due not only to weak external demand, but also to challenges to Canadian competitiveness.

It says the federal government appears on-track to keep its promise of balancing the budget by 2015 and notes, conversely, that some provinces have fallen behind in their deficit-elimination timetables.

It suggests that if risks to the economy materialize, the federal government has some manoeuvring room and can slow the return to fiscal balance.