After Canada's strong recovery from the global financial crisis, its economic growth is moderating, the IMF said Monday. A resilient financial sector and high commodity prices helped the Canadian economy expand above its potential growth rate in 2010, said the IMF in a preliminary briefing on the fund's annual report on the Canadian economy. "Broadly, Canada is doing well," said Gian Maria Milesi-Ferretti, IMF mission chief to Canada. "Especially compared to other G7 countries, Canada has recovered well from the crisis." However, global financial uncertainty has led the fund to project a more moderate outlook for Canada for 2011 and 2012. Weak demand for Canadian products, a strong Canadian dollar and a sluggish US economy were factors in scaling down the predicted growth rates to an average of two percent annually for 2011 and 2012. The projections were in line with a Bank of Canada report predicting 2.1 percent growth in 2011 and 1.9 percent growth in 2012. "It weighs on consumer and business confidence when you have the risk of turmoil in Europe morphing into a more systemic financial market problem," said Milesi-Ferretti. Domestically, the IMF looked favorably on the Canadian government's plan to reduce the budget deficit over the next four years, but cautioned against rising consumer household debt levels. "Consumer household debt, particularly for the purchase of housing, has gone up quite substantially and house prices are quite elevated," said Milesi-Ferretti, pointing at housing markets in westernmost British Columbia and the Toronto area. "If house prices slow or decline, you may have household balance sheets being a bit stretched," said Milesi-Ferretti. The IMF also cautioned about the risks of long-term expenditure pressures due to rising health care costs as the Canadian population ages. And it warned that a prolonged period of low interest rates -- now at historical lows -- could lead to more risk-taking by banks, weigh on insurance firms' profitability and present challenges for the solvency of pension funds with defined benefits. The final IMF report is due out in mid-December following a meeting of the IMF board on December 9th.