In the next two years, Canada’s economy is expected to grow at a slower pace than previously anticipated, says one of the world’s leading policy organizations.
The Organization for Economic Co-operation and Development said Thursday that after eking out a 1.2 per cent expansion in 2015, Canada’s economy is on track to grow by 1.4 per cent this year and 2.2 per cent in 2017.
“The downgrade in the global outlook since the previous Economic Outlook in November 2015 is broadly based, spread across both advanced and major emerging economies, with the largest impacts expected in the United States, the euro area and economies reliant on commodity exports, like Brazil and Canada,” said the OECD report.
In 2015, the world’s economy grew by five per cent, it’s slowest pace in five years, the OECD said. The group expects a repeat performance in 2016.
“Global growth prospects have practically flat-lined, recent data have disappointed and indicators point to slower growth in major economies, despite the boost from low oil prices and low interest rates,” said OECD chief economist Catherine L. Mann. “Given the significant downside risks posed by financial sector volatility and emerging market debt, a stronger collective policy approach is urgently needed, focusing on a greater use of fiscal and pro-growth structural policies, to strengthen growth and reduce financial risks.”
The OECD projects that the global economy will grow by 3 per cent this year and 3.3 per cent in 2017, which is well below long-run averages of around 3.75 per cent.
The estimate for U.S. growth has been lowered by 0.5 to 2.0 per cent in 2016 and by 0.2 to 2.2 per cent in 2017. There were also downgrades for the other G7 countries — Germany, France, Italy, Japan and the United Kingdom — as well as Brazil.
The forecasts for China held steady at 6.5 per cent growth in 2016 and 6.2 per cent in 2017. India’s growth estimate for 2016 was raised to 7.4 per cent, up 0.1, while the 2017 estimate was lowered to 7.3 per cent, down 0.1.