News Staff - Wed. Oct. 6 2010 

The International Monetary Fund is predicting Canada will continue to lead G7 nations in the economic recovery this year and in 2011.  The IMF says Canada's economic recovery has slowed, but it is still leading the other major developed economies. Canada's economy will expand by 3.1 per cent this year and 2.7 next year, the IMF predicts.

In its October World Economic Survey, the IMF said the "dismal" housing sector was dragging down world economic growth as homes are becoming less affordable.

The Canadian government made it harder to enter the real estate market earlier this year by raising the down payment required for investment properties.A raise in interest rates is expected to further slow the sector next year.

This week, Canadian Finance Minister Jim Flaherty said the economic boom times are over in Canada for the time being. "This is not a time of booming economic growth, it's a time of modest growth and there needs to be some adjustment of expectations," he told economists in a private meeting.

The IMF says the U.S. economy will grow 2.6 per cent this year and 2.3 per cent next year.The IMF had previously predicted both the U.S. and Canadian economies perform better this year.

Economic weakness in Europe remains a problem, but the IMF predicts growth in China and other emerging economies will offset that.The IMF predicts the world economy will grow by 4.8 per cent this year and 4.2 per cent in 2011.

Last year, the world economy shrunk by 0.6 per cent in its worst showing since the Second World War.

With files from The Canadian Press