Canadian growth less than expected: IMF

The global economy is set to improve faster than expected this year, but while developing economies will exceed expectations, advanced economies such as Canada will see slower growth in 2011, according to a new report from the International Monetary Fund.

The World Economic Outlook issued Tuesday by the IMF predicts the global economy will expand by about 4.5 per cent this year, up from an earlier prediction of 4.2 per cent.
Canada's 2011 growth estimate is revised downward in the report, from 2.7 per cent predicted a few months ago down to 2.3 per cent.
Overall, advanced economies will slow from the 3 per cent growth recorded last year, to about 2.5 per cent this year.
However emerging economies will see a much faster rate of improvement, with predicted growth of 6.6 per cent this year and similar advances in 2012. That's down slightly from 7.1 per cent last year, but still a strong rate of advance.
In its Global Financial Stability Report, issued alongside the World Economic Outlook report, the IMF said there are still major problems within the global economy.
"Nearly four years after the onset of the largest financial crisis since the Great Depression, global financial stability is still not assured and there remain significant policy challenges to be addressed," said the report.
The report focused particular concern on Europe's weak economic health and said more money should be put into bank rescue funds.
"The most urgent requirements for robust recovery are comprehensive and rapid actions to overcome sovereign and financial troubles in the euro area and policies to redress fiscal imbalances and to repair and reform financial systems in advanced economies more generally," the WEO Update said.
Among advanced economies, the reports predicted the following:
Canada
2010: 2.9
2011: 2.3
U.S.
2010 -- 2.8
2011 -- 3.0
Euro Area
2010 -- 1.8
2011 -- 1.5
Japan
2010 -- 4.3
2011 -- 1.6
U.K.
2010: 1.7
2011: 2.0
But the numbers are more robust among "emerging and developing" economies. Russia is predicted to improve from 3.7 per cent growth to 4.5 per cent. China will see a dip from 10.3 per cent growth to a still-impressive 9.6 per cent. Sub-Saharan Africa is predicted to go from 5 per cent growth in 2010 to 5.5 per cent in 2011.
In the Global Economic Stability report the Washington-based IMF said financial problems in Ireland and Greece have raised fears among other countries about the manageability of their sovereign debt.
Jose Vinals, the IMF's director of monetary and capital markets, told reporters that even more than two years after the global financial crisis, global financial stability is still at risk.
"Banks face significant funding needs now and over the next two years. In many advanced economies, we need to deal with the legacy of the crisis by resolving financial fragilities once and for all," Vinals said.