Alberta continues to be the weakest link in the Canadian economy, the International Monetary Fund announced in its latest world economic outlook released on October 4.
The IMF clipped its projections for Canada’s economic growth up to the end of next year by 0.2 per cent, The Globe and Mail
reported. The organization now estimates the Canadian GDP to grow by 1.2 per cent in 2016 and 1.9 per cent in 2017.
Canada’s economy will be “held back by the severe impact of wildfires in Alberta on oil output in the second quarter,” the IMF stated in its report.
The sluggish rate of recovery also introduces much risk to an economy still reeling from the worst effects of the petroleum crash.
“Canada’s oil production is strong, but new investment in oil sand fields is limited,” the IMF report said.
Overall, the prospects for the global economy remained uncertain, with the IMF’s growth forecast remaining static at 3.1 per cent for 2016 and 3.4 per cent for 2017. Advanced economies are predicted to grow by 1.6 per cent this year and 1.8 per cent the next, while emerging market and developing economies are expected to grow by 4.2 per cent this year and 4.6 per cent the next.
“Taken as a whole, the world economy has moved sideways,” IMF chief economist Maurice Obstfeld said. “Without determined policy action to support economic activity over the short and longer terms, sub-par growth at recent levels risks perpetuating itself.”
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