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OECD: countries still need to make reforms to improve growth

OECD: countries still need to make reforms to improve growth

The Organisation for Economic Co-operation and Development left its forecast for 3.6 percent global growth this year unchanged, while increasing its outlook for 2018 a tenth of a point to 3.7 percent.

The Paris-based economic think tank now expects the Canadian economy to grow by 3.2 per cent this year, outperforming every other country in the G7 group of advanced economies (i.e. France, Germany, Italy, Japan, the United Kingdom, and the U.S.).

The OECD forecast that the economic growth in Euro area will be 2.1 percent this year while it will be 3.7 percent for G20 countries. The organization maintained its Canadian outlook for 2018 at 2.3 per cent.

The OECD's latest Interim Economic Outlook report also said Japan's real gross domestic product is seen rising 1.6 percent in 2017, up 0.2 point from the June report. However, "strong, sustainable, and inclusive medium-term growth is not yet secured", the OECD wrote.

"The short-term outlook is more broad-based and the upturn is promising, but there is no room for complacency", said OECD Chief Economist Catherine L. Mann. "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 Canadian economy has consistently beat analysts' expectations this year, most recently by recording growth of 4.5 per cent between April and June this year, which was far above the consensus forecast of 3.7 per cent.

However, the pace of growth in Canada is expected to slow in the second half of the year. The projection for next year was kept at 2.3%.

"Emerging markets are key for overall global growth - strong future growth depends on deeper reforms".

The OECD predicted better than expected growth in Russian Federation - 2% rather than 1.4% this year and 2.1% rather than 1.6% next year.

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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