Economy & Markets

The organization’s outlook for global economic growth is unchanged for 2017, but slightly higher for 2018

By Canadian Press |
Source: The Canadian Press

The Organization for Economic Co-operation and Development (OECD) raised its expectations for economic growth in Canada on Tuesday as the country is expected to top the G7.

The Paris-based economic think tank raised its outlook for growth in the Canadian economy to 3.2% this year compared with a June forecast for 2.8%.

It maintained its Canadian outlook for 2018 at 2.3%.

Meanwhile, the organization's outlook for global economic growth was unchanged at 3.5% for this year and up slightly at 3.7% for 2018, compared with 3.6% in its previous forecast.

Expectations for the U.S. were unchanged at 2.1% this year and 2.4% next year.

"The short-term outlook is more broad-based and the upturn is promising, but there is no room for complacency," OECD chief economist Catherine Mann said in a statement.

The OECD upgraded its expectations for the euro area to growth of 2.1% rate in 2017 and a 1.9% pace in 2018. That compared with an earlier outlook for growth of 1.8% in 2017 and 1.8% in 2018.

Growth in Japan is expected to be 1.6% this year and 1.2% next year. That's up from the June forecast for 1.4% in 2017 and 1.0% in 2018.

The upgrade in the OECD outlook for Canada follows a second quarter that saw the economy grow at an annual pace of 4.5%.

However, the pace of growth in Canada is expected to slow in the second half of the year.

The Bank of Canada has raised its key interest rate target by a quarter of a percentage point twice in recent months, while the housing market has also slowed.