The International Monetary Fund says Canada is in for a tougher recession ride than what's been forecasted by the Bank of Canada, the Harper government and their supporting cast of Ignatieff Liberals.
From, of all places, CanWest:
...the recession in Canada this year will be much deeper than this week's federal budget is projecting and the recovery next year a lot weaker than projected by either the government or Bank of Canada.
"A sustained economic recovery will not be possible until the financial sector's functionality is restored and credit markets are unclogged," the global lender of last resort warned in releasing its latest forecast.
It now sees the Canadian economy contracting by 1.2% this year, which is weaker than the 0.8% shrinkage projected in the federal budget, and then posting only a marginal 1.6% recovery next year, which is also less than the 2.4% projected in the budget and the 3.8% forecast last week by the Bank of Canada.
The IMF's forecast for Canada this year is also down from its previous projection of 0.3%, noted TD economist Eric Lascelles.
More interesting, however, is the weakness of the IMF forecast for Canada's economy next year, he added.
"This is the weakest figure we have seen, and it appears that the IMF has revised the Canadian outlook downward by the most of any 'advanced economy,' " he observed. "The divergence between the IMF and the Bank of Canada outlooks are extreme, and we are more sympathetic to the IMF than the Bank of Canada outlook at this juncture, given all of the risks of a sustained slowdown."
Great, so we've got a stimulus budget - backed by the Ignatieff Liberals - that's based on hopelessly flawed, fatally optimistic projections.
Way to go, Iggy.