Canadian economic growth will feel the impact of the slowdown in the United States this year, but should rebound moderately in 2009, the International Monetary Fund said today.

The IMF said Canada’s GDP would grow by 1.3% this year, well below last year’s 2.7% increase. The prospects for 2009 are rosier, with the IMF forecasting growth of 1.9%.

The U.S. economy, however, will likely experience a “mild recession” this year and will manage only a slight recovery in 2009, the IMF said in its World Economic Outlook.

The IMF said growth in the U.S. would be just 0.5% in 2008 — a full percentage point lower than an interim forecast the IMF issued just three months ago. Growth will edge up to just 0.6% in 2009, it said.

The IMF blames deepening fallout from the U.S. housing correction and “a financial crisis that has quickly spread from the U.S. subprime sector to core parts of the financial system.”

The outlook fingers the unfolding financial market turmoil as the “biggest downside risk” to the global economy. On Tuesday, the IMF warned that the U.S. mortgage and credit crises could cause almost US$1 trillion in financial losses.

Global economic growth will slow to 3.7% this year, with the slowdown most apparent in developed economies, the IMF forecast. But it said emerging economies will also feel some pain.

China’s 11% growth in each of the past two years will slow to 9.3% this year, the forecast says. India’s economic growth will ease from 9.2% last year to 7.9% in 2008.

The IMF also says there’s a 25% chance of a global recession in 2008 and 2009.