Canada's economy is expected to grow a lukewarm annualized rate of 1.3 per cent in the third quarter and by 1.9 per cent in the fourth, the Paris-based Organization for Economic Co-Operation and Development said Thursday.

Of all the members of the G7 economies, Canada will trail only the United States, which is forecast to see growth of 2 per cent in third quarter and 2.4 per cent in the last three months of the year.

OECD chief economist Pier Carlo Padoan said that the G7 economies are expected to grow at an annualized rate of just 0.3 per cent and 1.1 per cent for the third and fourth quarters, respectively.

“Our forecast shows that the economic outlook has weakened significantly since last spring,” Padoan said. “The slowdown will persist if leaders fail to address the main cause of this deterioration, which is the continuing crisis in the euro area.”

That crisis is dampening global confidence, weakening trade and employment and slowing economic growth around the globe, the OECD said.

Even Germany, normally the powerhouse economy of Europe, is forecast to contract at an annualized rate of 0.5 per cent in the third quarter and at 0.8 per cent in the fourth quarter.

Padoan said weak economies are expected to push unemployment rates beyond current high levels.