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TORONTO (Reuters) - The Canadian economy will begin growing again in the second half, boosted by global stimulus efforts, but the pace will be sluggish, the Conference Board of Canada said on Monday.
The not-for-profit research group forecast the country's gross domestic product would fall by 1.9 percent for the year, a slight revision downward from the 1.7 percent decline it forecast in April.
It expects the economy to grow 2.7 percent next year.
The group predicted the Canadian economy will follow the lead of the United States, which it also expects to grow in the second half.
But it warned that the effects of the global recession will linger into 2010 and recovery will be slow.
For this year, the "only positive contribution" to Canada's domestic economy will come from government infrastructure and other stimulus, the Ottawa-based group said.
The federal government has said it expects to have a C$50 billion ($43.1 billion) deficit in the current fiscal year, in large part because of stimulus spending.
The main sources of rebound in 2010 in Canada will be public infrastructure spending, growth in U.S. household spending and recovery in both resource prices and exports, the Conference Board said.
Modest recovery in U.S. housing residential construction and auto sales will help reverse the tide for Canadian export growth, it added.
The Conference Board forecast the Canadian dollar will be worth 86.5 U.S. cents this year on average and appreciate in 2010 on the back of higher commodity prices. The currency was trading at about 86.20 U.S. cents on Monday.
Reporting by Jennifer Kwan; Editing by Jeffrey Hodgson