UPDATE 1-IMF sees Canada economy picking up in 2014, rates on hold

Wed Nov 27, 2013 2:10pm EST
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

* IMF says economy should grow by 2.25 percent in 2014

* Sees interest rates rising in early 2015

* Projects inflation to reach 2 percent by end 2015

By Leah Schnurr

TORONTO, Nov 27 (Reuters) - Economic growth in Canada should accelerate next year as a pick-up in the U.S. recovery boosts exports, but low inflation means the Bank of Canada can wait to raise interest rates until early 2015, the International Monetary Fund said on Wednesday.

The IMF sees Canada's economic growth accelerating to 2.25 percent in 2014 from an estimated 1.6 percent this year. While household consumption has remained robust this year, growth in exports and business investment has disappointed.

As demand and capacity utilization increase next year, business investment is expected to strengthen, particularly spending on machinery and equipment, the IMF said in a report.

"Twelve months ago we were expecting the economy to accelerate over 2013. I have to say, that hasn't happened to the extent to which we were expecting," Roberto Cardarelli, IMF mission chief to Canada, told reporters.

"The culprit is especially exports, which have not picked up as much as we were expecting last year, and business investment, which has slowed over the last few quarters."   Continued...