OECD cuts growth outlook for Canada's economy this year and next
Canada, other economies 'reliant on commodity exports' bear brunt of global slowdown
One of the world's leading policy organizations now expects Canada's economy to grow by less than previously anticipated for the next two years, and the OECD has also downgraded estimates for other G7 countries.
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 next year.
The forecasts for this year and next are less than had been expected by the group, which conducts research on the world's richest nations, in its last quarterly forecast.
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As recently as November, the group was expecting Canada's economy to grow by two per cent this year and 2.3 per cent next year.
The group singled out Canada and other economies described as "reliant on commodity exports" for bearing the brunt of a global economic slowdown that seems underway.
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.
"Trade and investment are weak," said Catherine Mann, the organization's chief economist. "Sluggish demand is leading to low inflation and inadequate wage and employment growth."
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.