Canadian economy activity is expected to pick up this year and through 2004, the Organization for Economic Co-operation and Development said Tuesday.

The policy group sees economic growth here of 2.7%, rising to 3.4% next year.

“Although the current slowdown could last a little longer in case of a delayed or sluggish U.S. recovery or because of the impacts of SARS and BSE, economic activity is expected to gradually pick up again toward the end of the year and through 2004 as the global economy gathers strength,” the Paris-based group said in a report.

The OECD also indicated inflation will be benign in Canada.

“With some slack in labour and product markets, there is downward pressure on underlying inflation, and headline rates should soon converge on the 2% midpoint of the target range,” the group said.