-- The International Monetary Fund's latest World Economic Outlook (WEO) arrives in a period when a rapidly changing geopolitical backdrop makes economic and fiscal projecting, already difficult in the most 'normal' of times, even more challenging, said National Bank of Canada.
Dubbed 'Global Economy in the Shadow of War', the April 2026 WEO released on Tuesday concedes this uncertainty with the presentation of a scenario-based forecast that hinges on developments in the Middle East.
In the base case outlook, however, global growth is only on a modestly lower path compared with prior guidance, noted the bank.
While Canada's growth outlook is largely unchanged, governments have moved to protect/defend a trade-sensitive economy, stated National Bank.
That extra budgetary red ink is captured in this latest IMF forecast, pointed out the bank. Net borrowing is seen as more substantive yet again, which is directionally inconsistent with other G7 countries, which saw improvements relative to the October 2025 IMF report.
That's not to say Canada doesn't remain in a favorable fiscal standing, added National Bank. The budget deficit, while loftier following the pandemic, remains contained relative to other jurisdictions, particularly the United States, which isn't expected to see the same level of consolidation in the years to come.
Meantime, Canada's "serious" net debt edge, brought on by plentiful financial assets at the government/public pension level, is only set to build from here, according to the bank.