Canada on upswing; EU hurting

New economic projections show the global economy is growing, albeit slowly, lifted by a resurgence in trade and market confidence, but stymied by the euro crisis that has deepened since a temporary easing in late 2011.

Canada, Japan and the United States are growing faster than the euro countries, while emerging markets experience a “moderate cyclical upswing,” according to the Economic Outlook published Tuesday by the Organization for Economic Co- operation and Development.

Canada’s GDP is expected to grow 2.25 per cent this year and 2.5 per cent in 2013, according to the report, driven by private consumption and investment.

“It’s not a great outcome. A generation ago, coming out of a recession like this, we would have thought this was deplorable, but it’s not bad,” said Peter Jarrett, a senior economist with Paris- based OECD.

Canada’s growth will outpace the OECD index of 34 nations, which is expected to be 1.6 per cent in 2012 and 2.2 per cent in 2013.

Meanwhile, OECD stressed the crisis in the eurozone remains the most severe risk facing the global outlook. While unemployment rates in Canada and the United States have recently trended downward, the euro area’s jobless rate has risen since 2011 and is expected to hover around 11 per cent through 2013.

Further, market confidence is rising in the United States, but falling in Europe.

The OECD report flagged Canada’s housing sector as imbalanced and noted a rate hike is also needed to slow down housing prices.

“We also feel that would help cool off the housing market in the places where it’s been hot and we expect it to remain hot in some of those places, particular in Toronto,” Jarrett said.