OTTAWA, Jan 30 (Reuters) - Canada’s economy will retain its momentum this year, despite a sharp drop in oil prices, thanks to exports to a recovering United States that will offset declines in domestic consumption and investment, the International Monetary Fund (IMF) said on Friday.
While the make-up of the Canadian economy has not yet shifted to a broad-based recovery, it is expected to become more balanced this year as the housing market cools, the IMF said.
Still, the recent drop in oil prices will be a drag on growth due to weaker energy sector investment, with the economy expected to see 2.3 percent growth this year, slightly lower than 2014’s estimated 2.4 percent rate.
“Downside risks to the outlook have risen in light of further oil price declines, adding to the risks of weaker global growth and still-unfolding effects from the unusually large fall in oil prices,” the IMF said in its report.
The IMF completed its consultations with Canadian officials on the state of the economy in late January. (Reporting by Leah Schnurr; Editing by Chizu Nomiyama)