Another big Canadian bank is predicting weak growth for the Canadian economy next year as the country is squeezed by a weak job market, worldwide recession fears and record consumer debt.

In a report Thursday, Scotiabank predicted Canadian growth of below two per cent in 2012, though oil and gas megaprojects and public infrastructure investment will help some parts of the economy.

However, household spending gains will be dampened by weak job creation and rising consumer debt, now at record levels.

The looming cuts in the United States and Eurozone countries will dampen worldwide growth and also point to ongoing volatility in currency, stock and bond markets, the bank said in its 2012-2013 economic and market outlook.

The United States economy will also produce slow growth in 2012 — struggling to reach two per cent — on weaker household spending and a sluggish recovery in the jobs market.

“Financial markets have been buffeted in recent months by heightened investor anxiety over prospects for global growth, the sovereign debt crisis in Europe and the limited progress in bringing Washington’s massive fiscal deficit under control,” Scotiabank’s chief economist Warren Jestin said in a release.

“For debt- and deficit-heavy nations, the magnitude of the structural adjustments required for meaningful fiscal repair will dampen growth through mid-decade. While some European nations will eke out gains, overall growth in 2012 will be non-existent in the Eurozone as public sector retrenchment and private deleveraging push a number of distressed economies into — or deeper into — recession.”

The Scotiabank estimates are similar to a report from TD Bank (TSX:TD) released Wednesday which saw the bank downgrade its economic growth expectations to 1.7 per cent next year.

Meanwhile, Bank of Montreal predicted Thursday that the Canadian economy will grow two per cent in 2012, down from 2.3% this year.

Despite continued low borrowing costs, expected budget cuts in Ottawa and the provinces to rein in government deficits will dampen growth prospects, the bank said.

“We will see fiscal policy shift more notably to restraint from about neutral in 2011, with both the federal and many provincial governments leaning more heavily on the brakes,” said Doug Porter, deputy chief economist of the BMO Capital Markets division.

Economic growth of less than two per cent will make it much harder for the nearly 1.4 million unemployed Canadians to find jobs next year because of the normal natural expansion in the labour force.

The November jobless rate of 7.4% is expected to rise, possibly as high as eight per cent, in 2012 if the economy slumps even more than expected.

In its forecast, Scotiabank (TSX:BNS) also said emerging economies will grow more moderately, with China at nine per cent and India at eight per cent.

That suggests that a slowdown in those Asian economies will also dampen demand for minerals, metals, coal and other resources Canada produces and exports around the world.