External risks more acute for Canada than in the recent past: IMF

A new report by the IMF says the external risks facing the Canadian economy are more acute than in the recent past.

The agency says the risks relate to the impact of policy changes in the U.S. and the ongoing NAFTA talks.

It estimated that failure to reach a new NAFTA agreement could reduce long-run Canadian real gross domestic product by 0.4 per cent relative to its baseline forecast.

That amount could increase if non-tariff trade costs increase, the report noted.

The IMF also said the housing market continues to remain a key domestic risk for the economy.

But, it noted that the vulnerability has moderated somewhat, as the housing market has shown signs of cooling down.