OECD predicts Canada's economic growth to be best in G7

Ellen Mills
September 22, 2017

The Organization for Economic Co-operation and Development (OECD) has raised its expectations for economic growth in Canada this year as part of its interim outlook on the global economy.

The Paris-based economic think tank says it now expects the Canadian economy to grow by 3.2 per cent this year, best in the G7.

"The projections reflect modest improvements in the global economy since the previous Economic Outlook in June 2017", the OECD said, noting that its former global growth forecast for 2018 was 3.6 percent.

The OECD revised its forecast for India down from 7.3% to 6.7% growth in 2017 and from 7.7% to 7.2% in 2018.

As China's economic fundamentals improve, global institutions have generally raised their forecasts of China's growth and expressed more confidence in the country's prospects in recent months, although indicators have pointed to slight weakening of the economy in August.

The UK economy remains a laggard, however.

The short-term outlook is more broad-based and the upturn is promising, but there is no room for complacency, said OECD Chief Economist Catherine L. Mann.

The economist also stressed that structural efforts must be intensified to bolster the nascent investment recovery, to address slow productivity growth and to ensure the recovery yields benefits for all.

"Job creation has remained strong, but the extent to which fiscal easing and regulatory reform may provide an additional boost in 2018 remains uncertain", the organization wrote about the U.S.in a press release.

Growth this year is "higher than in 2016 but still below historical norms" said the OECD, which advises industrial nations on economic policy. Uncertainty over the country's exit from the European Union will continue to hobble its economy, the OECD said.

Japan's expected growth was a contributing factor, with the forecast for this year and next upped by two points to 1.6% and 1.2%. That's up from the June forecast for 1.4 per cent in 2017 and 1.0 per cent in 2018. That compared with an earlier outlook for growth of 1.8 per cent in 2017 and 1.8 per cent in 2018.

However, the tax should lead to higher investment, productivity and growth in the long term, the OECD said.

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