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OECD says world economy beginning to rebound

Canadian growth lagging behind several G7 countries, including the US, Japan Germany.


March 28, 2013
by The Canadian Press

PARIS – Canada is expected to lag several Group of Seven countries in the first quarter even as the global economy begins to rebound, the Organization for Economic Co-operation and Development (OECD) says.

The international economic think-tank estimates that the Canadian economy will show growth of just 1.1% in the first three months of this year, much slower than the United States or Japan and below the G7 average.

However, it is expected to pick up steam and grow by 1.9% in the second quarter, slightly above the average.

Statistics Canada reports that Canada’s GDP grew by 0.2% month-to-month in January, the beginning of the first quarter. The agency’s report for the full quarter won’t be out until May 31.

The G7 countries – Canada, the US, Japan, Germany, Britain, France and Italy – are expected to post an average growth rate of 2.4% in the first quarter ending March 31 and 1.8% in the second ending June 30.

The OECD believes the US economy advanced 3.5% in the first quarter, which ends this month, but that its growth will moderate in the second quarter to 2.0%.

Likewise, the OECD expects Japan’s growth will be a robust 3.2% in the first quarter but slow in the second to 2.2%.

Among the European G7 countries, Germany will be the only one growing faster than Canada – 2.3% in the first quarter and accelerating to 2.6% in the second.

The UK economy is expected to have only 0.5% growth in the first quarter and 1.4% in the second, while France’s economy is expected to contract by 0.6% in the first quarter then expand by a modest 0.5% in the second.

Italy’s economy is expected to shrink in both quarters, dropping 1.6% in the first and 1.0% in the second.

In an interim assessment that focused on the G7, the OECD said that the European Central Bank needs to do more to encourage banks to lend and economies to grow.

It notes that countries that use the euro are making progress in reducing their debts, but that some should be allowed to meet their targets more slowly to temper the impact on their economies.

©The Canadian Press