The Organisation for Economic Co-Operation and Development has lowered its growth projections for Canada, the United States and the overall global economy.
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 鈥� slightly less than previously thought.
However, the OECD鈥檚 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.
鈥淐anada is doing, with regard to fiscal spending, what we are arguing should be done on a collective basis in the entire OECD,鈥�
Because many economies have the capacity to borrow at low or even negative interest rates, 鈥渇iscal spending on infrastructure, along with monetary ease and structural forms, are the recipe to bring global growth back,鈥� she said.
Mann also said that, despite lower oil prices and a falling loonie, Canada is benefiting from its diversified exports base.
鈥淣ot all countries have been able to do that,鈥� she said.
David Detomasi, a professor at Queen鈥檚 University Smith School of Business, said that Canada has been 鈥渞iding the commodity boom鈥� 鈥� 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鈥檛 caught up to the point where they can 鈥渕ake up the difference,鈥� Detomasi told 麻豆传媒 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.
鈥淩ight 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,鈥� Mann said.
鈥淎t these rates of growth, politicians cannot make good on the promises they鈥檝e made to their citizens,鈥� 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鈥檚 projection.
With files from The Canadian Press
