OECD adds ma­jor caveats to bullish global out­look

Vancouver Sun - - FP VANCOUVER -

PARIS The global econ­omy will grow close to four per cent this year and next, bet­ter than pre­vi­ously an­tic­i­pated, ac­cord­ing to the OECD, which added a warn­ing that a trade war could roll back the gains seen in re­cent years.

Up­grad­ing its fore­casts, the Paris-based group in part cited U.S. tax cuts for the bet­ter num­bers. It sees the world econ­omy ex­pand­ing 3.9 per cent in both 2018 and 2019, the strong­est since 2011. That’s up from 3.7 per cent and 3.6 per cent re­spec­tively com­pared with its Novem­ber pro­jec­tions.

The OECD says it now ex­pects the Cana­dian econ­omy to grow 2.2 per cent this year, up from an ear­lier pre­dic­tion of 2.1 per cent. It also raised its Cana­dian growth out­look for next year to 2.0 per cent com­pared with its fore­cast in Novem­ber for 1.9 per cent.

The OECD says the re­vised out­look com­pares with growth of 3.0 per cent last year in Canada.

But its out­look came with a ma­jor caveat in the wake of the U.S. de­ci­sion to slap im­port tar­iffs on steel and alu­minum and the threat of re­tal­i­a­tion by China, the Euro­pean Union and oth­ers. The OECD, which groups 35 de­vel­oped economies, called on the world’s ma­jor na­tions to avoid a dis­pute that could im­pede trade, de­mand, com­pe­ti­tion and, ul­ti­mately, the health of the global econ­omy.

“Trade pro­tec­tion­ism re­mains a key risk that would neg­a­tively af­fect con­fi­dence, in­vest­ment and jobs,” it said on Tues­day. On its lat­est fore­casts, the OECD said “stronger in­vest­ment, the re­bound in global trade and higher em­ploy­ment are help­ing to make the re­cov­ery in­creas­ingly broad-based.”

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