OECD lowers Canadian, global growth projections

The Organisation for Economic Co-Operation and Development has lowered its growth projections for Canada, the United States and the overall global economy.

See Full Article

The OECD estimates that Canada's economy will grow by 1.4 per cent in 2016, less than its previous estimate of 2.0 per cent growth. That growth is expected to increase to 2.2 per cent in 2017 – slightly less than previously thought.

However, the OECD’s chief economist, Catherine Mann, told BNN that Canada is still on the right track when it comes to fiscal spending.

During the election campaign, Prime Minister Justin Trudeau promised an additional $60 billion over 10 years towards infrastructure projects in order to stimulate the economy. But he has faced criticism for planning to run three consecutive budget deficits as a result.

“Canada is doing, with regard to fiscal spending, what we are arguing should be done on a collective basis in the entire OECD,” Mann told BNN on Thursday.

Because many economies have the capacity to borrow at low or even negative interest rates, “fiscal spending on infrastructure, along with monetary ease and structural forms, are the recipe to bring global growth back,” she said.

Mann also said that, despite lower oil prices and a falling loonie, Canada is benefiting from its diversified exports base.

“Not all countries have been able to do that,” she said.

David Detomasi, a professor at Queen’s University Smith School of Business, said that Canada has been “riding the commodity boom” – which includes oil exports -- for the past 15 years, but demand has been slowing down in emerging markets, especially China.

In the meantime, our exports to the United States haven’t caught up to the point where they can “make up the difference,” Detomasi told CTV News Channel.

He said the downward trend is still not being felt in some industries, especially when it comes to home and auto sales, which are still strong.

OECD data shows that growth projections for Canada, U.S. and other G7 countries, including France, Germany and Japan, are dragging down the overall global outlook.

The OECD expects that U.S. economic growth over the next two years will be slower than the 2.4 per cent estimate for 2015. The organization has also lowered its outlook for global economic growth to 3 per cent in 2016 and 3.3 per cent in 2017.

“Right now, we are looking at a flat line of global growth. No change in global growth between 2015 and 2016 and only a very modest uptick for 2017,” Mann said.

“At these rates of growth, politicians cannot make good on the promises they’ve made to their citizens,” such as jobs for young people and pensions for seniors, she added.

The revised outlook for the Canadian economy by the OECD brings it in line with the latest forecast by the Bank of Canada, which is predicting growth of 1.4 per cent this year. The BoC is predicting growth of 2.4 per cent in 2017, 0.2 per cent higher than the OECD’s projection.

With files from The Canadian Press



Advertisements

Latest Economic News

  • ECB unlikely to signal stimulus end, despite French optimism

    Economic CTV News
    FRANKFURT -- Europe's strengthening economy dodged a banana peel when a pro-EU candidate won the first round of the French presidential election. That won't be enough, however, to make the European Central Bank signal an end to monetary stimulus program on Thursday. Source
  • Asia tracks French election rally; weak yen lifts Tokyo

    Economic CTV News
    TOKYO -- Shares are higher in Asia, tracking the rally sparked by the outcome of France's vote. Hopes for U.S. tax reform and a compromise on the U.S. budget deadline also lifted sentiment. Japan's benchmark gained as the dollar remained near the 110 yen level, helping shares of exporters. Source
  • Alberta appeal court backs decision that favoured Redwater Energy creditors

    Economic CTV News
    CALGARY -- A court decision that gave secured creditors priority over environmental cleanup in the case of bankrupt Redwater Energy Corp. has been upheld by the Alberta Court of Appeal. The lawsuit has been closely watched as a precedent-setting case as bankruptcies continue to afflict the oil and gas industry after more than two years of low commodity prices. Source
  • What's driving the softwood lumber dispute?

    Economic CTV News
    The U.S. federal government announced Monday that it’s imposing “countervailing duties” on Canadian softwood lumber of up to 24.12 per cent. Observers warn that could mean thousands of jobs lost in Canada’s forestry sector, because our exports will suddenly become that much more expensive for Americans to buy. Source
  • U.S. imposes preliminary duties up to 24% on 'subsidized' Canadian softwood lumber

    Economic CBC News
    Canada's forest industry felt the slap of the countervailing duties they were bracing for late Monday, with confirmation out of Washington that a U.S. Commerce Department investigation has once again concluded that softwood lumber imports are unfairly subsidized. Source
  • Barrick Gold sees profits rise in quarter but misses analyst expectations

    Economic CBC News
    Barrick Gold's first quarter results fell short of expectations despite swinging to a profit of $679 million US compared to a net loss of $83 million US in the same quarter last year. The gold mining giant said that once adjusted, net earnings came in at $162 million US or $0.14 per share, compared with $127 million US or $0.11 per share in the first quarter of 2016. Source
  • CN raises 2017 outlook on record Q1 volumes, helped by higher grain

    Economic CBC News
    Canadian National Railway raised its outlook for the year after profits increased 12 per cent on record first-quarter volumes, helped by an increase in Western Canadian grain. The Montreal-based railway said Monday it expects to earn between $4.95 and $5.10 per adjusted diluted share for the year, an increase of eight to 11 per cent from last year. Source
  • Redwater Energy decision that gives creditors priority over environment upheld by Appeal Court

    Economic CBC News
    Decision could affect handling of abandoned wells across Alberta By Tracy Johnson, CBC NewsPosted: Apr 24, 2017 2:11 PM MTLast Updated: Apr 24, 2017 2:11 PM MT Source
  • Creditors over environment: Alberta Court of Appeal upholds Redwater Energy decision

    Economic CBC News
    Decision could affect handling of abandoned wells across Alberta By Tracy Johnson, CBC NewsPosted: Apr 24, 2017 2:11 PM MTLast Updated: Apr 24, 2017 2:11 PM MT Source
  • Law society urged to adopt $25K cap on referral fees in Ontario

    Economic CTV News
    TORONTO -- Lawyers in Ontario should have their fees for referring clients to another lawyer capped at a maximum of $25,000, a report released on Monday recommends. In addition, the report says lawyers should have to record referral fees paid or received in their books, and report on their referral-fee practices in their annual reports to the body that regulates the profession in the province. Source