Canada Ranks Third-Fastest Growing Advanced Economy for 2024, IMF Reports
Canada is set to experience the third-highest economic growth among advanced economies, according to the International Monetary Fund’s (IMF) latest forecast. The country ranks just behind the United States in the IMF’s projections.
Although the overall growth is still lower than the average between 2000 and 2019, IMF Chief Economist Pierre-Olivier Gourinchas believes that steady expansion and weakening inflation will lead to a soft landing for the global economy.
Gourinchas stated, Risks to global growth are now broadly balanced, adding that the global economy has displayed remarkable resilience and is heading for a smooth descent with declining inflation and sustained growth.
The IMF’s World Economic Outlook predicts a global growth rate of 3.1 percent in 2024, which is a 0.2 percent increase from the organization’s October forecast.
While Canada’s economy is expected to grow by 1.4 percent, a 0.2 percent decrease from the IMF’s October estimate, India and China are the front-runners in growth expectations for 2024, with estimates of 6.5 percent and 4.6 percent respectively. The United States ranks first among advanced economies with an anticipated growth rate of 2.1 percent, followed by Spain at 1.5 percent.
The Bank of Canada recently announced that the country’s economic growth has hit a standstill since mid-2023. It is now projected to remain close to zero in the first quarter of 2024. The persistence of core inflation measures led the central bank to keep its lending rate at a 22-year high last week.
Bank of Canada Governor Tiff Macklem expressed optimism, stating, As you move further into 2024, we expect global growth to start picking up. Most importantly for Canada, U.S. growth picks up. That increases demand for our exports.
While some business leaders argue that current borrowing costs have a chilling effect on the economy, a recent survey indicates that fewer Canadians are struggling due to the rate hikes compared to a year ago.
On Wednesday, Statistics Canada will release the latest economic snapshot through gross domestic product data for November 2023.
As Canada ranks as the third-fastest growing advanced economy for 2024, the IMF’s latest projections show encouraging signs for the global economic landscape. With steady expansion and declining inflation paving the way for a soft landing, the world economy is demonstrating resilience. While Canada’s growth is slightly lower than previously estimated, the United States leads the advanced economies. Bank of Canada Governor Tiff Macklem remains hopeful that global growth will improve, benefiting Canada’s export demand. Despite concerns from business leaders about high borrowing costs, the impact on individual Canadians appears to be easing. As we await the release of the November 2023 GDP data, optimism remains for Canada’s economic outlook in the coming year.
