A participant pictured at the OECD headquarters in Paris during the presentation of the Economic Outlook at the 2013 OECD Week on May 29, 2013.
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In a fresh outlook Wednesday, the OECD trimmed its forecasts for Canadian economic growth to just 1.1 per cent this year, and 2.1 per cent for next year, down 0.4 of a percentage point for 2015 and 0.2 of a point for 2016. Its estimate for 2016 dropped from 3.8% to 3.6%.
“Among other advanced economies, developments largely support the global recovery with economies either continuing to expand or recovery gaining momentum”.
The OECD saw more arguments in favour of the Federal Reserve raising interest rates than standing pat when its policy makers meet this week rather than at their next meeting at the end of the year. The outlook for this year was lowered from 3.1% and that for 2016 from 3.8%. For the eurozone, Ms. Mann said it is puzzling that the economy isn’t responding more to the European Central Bank’s quantitative easing program and urged authorities to ensure low interest rates are feeding through to bank loans to companies and households.
The slowdown in import demand from China has had a ripple effect on the global economy, particularly for developing markets with strong trade ties to China, the OECD said, while commodity-exporting emerging nations such as Brazil are likely to suffer from a weaker outlook.
Looking at the euro zone, its outlook was the brightest in four years.
The euro area is projected to grow at a 1.6% rate in 2015 and a 1.9% pace in 2016.
The OECD slightly lowered its growth estimate for China to 6.7 percent for this year and 6.5 percent next year after a string of disappointing data and stock market routs.
Brazil was a particularly weak spot in the global economic outlook.
According to OECD models, a combination of adverse financial shocks and a two-percentage-point decline in China’s growth rate would drag global growth down by 0.5 percentage points in 2017.
The group supported a rise in United States interest rates but said the pace will be critical.
“The timing of the first rate hike is of secondary importance compared to the pace of increase”. “The survey provides a prescient analysis of the challenges now faced by Ireland and of the policies to address these in areas such as fiscal sustainability, financial stability, inclusive growth, productivity and environmental sustainability”.
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The organisation said rising property prices pose risks, and advised more housing supply was needed and a more developed rental market, but it cautioned against giving any subsidies to first time buyers.
