OECD's Gurria stands by positive outlook for Canadian economy
The Secretary General of the Organisation for Economic Co-operation and Development is standing by his outlook for the Canadian economy despite a surprise downturn reported on Tuesday and the looming protectionist threat from the United States.
“It is one observation for one month. We should not see a trend in it,” Angel Gurria told BNN in an interview shortly after Statistics Canada data unexpectedly showed GDP fell 0.1 per cent in August.
“We are seeing a positive development of the Canadian economy for the rest of the year, and the year as a whole, and with that trend continuing into 2018.”
The Paris-based economic think tank recently said it expects the Canadian economy to grow 3.2 per cent this year, outperforming every other country in the G7 group of advanced economies.
“At this stage we do not see any reason to change the yearly number and the outlook in general is good,” said Gurria. “You are talking about being the highest-growing in the G7, you are talking about a performance that has been steadily positive even as there have been slippages in many other OECD and G7 countries, and you have seen very steady job creation.”
Gurria added the Bank of Canada has taken “appropriate” actions to manage Canada’s economic growth, but warned the central bank needs to be ready for headwinds including increased U.S. protectionism and uncertainty surrounding renegotiation of the North American Free Trade Agreement.
NAFTA has been a clear “win-win-win” for Canada, Mexico and the U.S., Gurria argued, while cautioning inequality is creating a backlash against globalization that threatens the economy.
“Protectionism, populism, exclusive nationalism – all these are bad ‘isms’,” he said. “[Globalism] does not have a face, it does not have a neck from which you can hang it,” he said.
“So you use trade or investment flows as a proxy… notwithstanding the world’s economic recovery, the benefits have not been shared equally.”