IMF says Canada’s economy faring better than expected amid trade shock
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A new report from the International Monetary Fund says the Canadian economy has fared better than expected under the trade shock from U.S. tariffs.
The impact of the trade dispute has been mitigated by waivers under the free trade agreement between Canada, the United States and Mexico, but employment and investment are still weak, the report said.
It said low commodity prices, soft external demand, slow immigration and tariff uncertainty have increased tensions.
Looking ahead, the IMF says the risk outlook has become more balanced than earlier this year, but uncertainty is expected to remain high.
The report, which is part of the IMF’s regular review of the Canadian economy, says the federal government’s budget is appropriately geared toward higher public investment, though it says a clear debt-to-GDP anchor should remain at the heart of Canada’s fiscal framework.
It says fiscal policy should remain measured, counter-cyclical and flexible.
