Royal Bank of Canada on Monday downgraded its growth forecast for the Canadian economy in 2011, citing weaker performance in the United States and Europe.

RBC Economics predicts Canada's real GDP will grow by 2.4 percent this year, down 0.8 percentage points from its target released in June.

Financial market volatility certainly took a toll on business and consumer confidence this summer, said RBC's chief economist Craig Wright said in a statement.

Our expectation that the global economy will avert another downturn, however, should temper the slide we've been seeing in the equity markets and in commodity prices.

Inflation is also expected to drift lower, reducing pressure for the Bank of Canada to resume interest rate hikes.

Last week, Canada's top bank economists predicted that the domestic economy should rebound modestly in the latter half of 2011, after a surprise contraction in the second quarter.