OECD predicts Canada's economic growth to be best in G7

OECD warns global recovery not yet secure

OECD warns global recovery not yet secure

Global growth was 3.1% in 2016.

"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. "Monetary policy should remain accommodative in some economies but with an eye on financial stability so as to remain supportive of further rebalancing towards fiscal and structural initiatives".

"The projections reflect modest improvements in the global economy since the previous Economic Outlook in June 2017", the OECD said, noting that its former global growth forecast for 2018 was 3.6 percent. Its June forecast noted the economy was gaining steam, propelled by government spending on infrastructure, social housing, education and innovation, as well as rising household wealth and rebounding business investment, particularly in the resource sector.

It maintained its Canadian outlook for 2018 at 2.3 per cent.

The OECD raised its growth forecast for the eurozone this year by three tenths of a point to 2.1 percent.

Growth forecasts for Germany, France and Italy were also raised. "A further slowing is expected in 2018, while uncertainty remains over the outcome of negotiations around Brexit", it stated. The unemployment rate has fallen to below 4.5%, but weak productivity and real wage growth persist. Stagnant wages, combined with a depreciation in sterling that has pushed up inflation, is dampening consumers' appetite for purchases. That compared with an earlier outlook for growth of 1.8 per cent in 2017 and 1.8 per cent in 2018.

Major emerging market economies also improved overall, with China's growth projected to 6.8% in 2017 and 6.6% in 2018.

Growth rates among the world's major economies are synchronising at levels not seen in years as the euro zone catches up with United States, the OECD said on Wednesday in an update of its forecasts.

The downward revision was due to the transitory effects of demonetization and of the implementation of the Goods and Services Tax (GST), the group said.

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