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The International Monetary Fund is raising its forecast for Canadian economic growth in 2018 and 2019, as recent tax reforms in the U.S. are expected to increase demand and give the entire North American economy a boost.

According to an update to the IMF’s fall report released Monday, the organization now believes Canada’s economy will grow by 2.3 per cent in 2018 and 2 per cent in 2019, up 0.2 and 0.3 percentage points respectively from its previous forecast.

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Among the G7 countries, Canada and Germany will have the second-strongest growth rates at 2.3 per cent this year, trailing only the U.S. at 2.7 per cent.

The IMF expects corporate income tax reductions that are part of U.S. tax changes to increase investment and have a positive impact on U.S. growth through 2020. Lower U.S. growth is forecast for a few years after 2021, since some of the tax policies are temporary.

Overall, global growth for 2018 and 2019 is expected to be 3.9 per cent in 2018 and 2019.