TORONTO - Ontario's newly re-elected Liberal government is not about to revise its spending plans because of gloomy economic predictions and a faltering U.S. economy, Premier Dalton McGuinty said Friday.

The Royal Bank of Canada said Friday that Ontario's economy is expected to grow by just 1.8 per cent in 2008 and not rebound until 2009.

"We've had to significantly lower our growth forecasts as heightened currency-induced challenges to manufacturing and exports have greatly affected the province's economy,'' said Craig Wright, vice-president and chief economist at RBC.

The revised forecast from RBC is a full point lower than the 2.8 per cent growth figure the Liberal government used to predict government revenues for 2008 in last spring's budget, and every one point is estimated to be worth $670 million to the province's coffers.

But McGuinty said Ontario managed to create jobs in the past four years, despite what he called "a perfect storm'' of economic challenges that his government faced during its first term.

"We had a dramatic increase in energy costs, dramatic growth in the value of the dollar, and notwithstanding that we created 400,000 net new jobs,'' McGuinty said.

"People tend to consistently underestimate the entrepreneurial capacity, drive, energy and success of the Ontario economy, and I'm confident that we will manage the challenges.''

McGuinty called the Liberal economic plan "balanced, prudent and responsible,'' and said he was confident the province can meet any new economic challenges from home or any further slow down in the U.S. economy.

"The last thing that we're going to do is make dramatic changes as a result of some preliminary talk about what is happening south of the border,'' he said. "We've had our eye south of the border for a long, long time, and we are confident that we can manage.''

McGuinty said he didn't have a "plan B'' in case the economy stumbles and doesn't recover by 2009 as many analysts expect it will, and advised people not to worry because he has every confidence in his economic plans.

"People out there can despair on their own,'' he said. "They put us in position of leadership, so that we will bring them hope.''

McGuinty refused to answer questions about possibly having to raise taxes if the economy falters, accusing reporters of having fun with his `no new taxes' promise so soon after the election.

He also called on the federal Conservative government to include some economic help for Ontario in Tuesday's throne speech opening the fall session of Parliament.

"I'd ask Prime Minister Harper to ensure that we are taken into account in terms of the opportunities that he provides to strengthen the country as a whole, as well as recognize the challenges that we face,'' said McGuinty.

"It would be great if they would double, for example, the support we're putting in place for the manufacturing sector. It'd be wonderful as well if they would recognize that if we were to do more together to support our municipalities, the city of Toronto for example, by providing one cent of the GST to our municipal partners. That would be very helpful to Ontario as well.''