OECD raises Canada's growth forecast as country is exempt from US steel and aluminium tariffs

The Organisation for Economic Co-Operation and Development (OECD), which monitors countries’ economic progress, has said that Canada’s economy is set to grow faster than initially predicted this year.

Strong global growth will contribute to investment and trade in the country, according to OECD, which is based in Paris and aims to “promote policies that will improve the economic and social well-being of people around the world”.

The forecast for growth has been raised from 2.1% to 2.2% in 2018, with the previous prediction having been made in November last year.

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However, in 2019, growth will slow to around 2% according to OECD – still a 0.1% rise from the previous prediction.

This renewed forecast is seen to be heavily linked to Donald Trump’s announcement last week that Canada will be exempt from US steel and aluminium import tariffs. This introduction had the potential to be seriously damaging for Canada as the largest supplier of steel and aluminium to the US.

However, now that exports to the US can remain steady in this regard, growth forecasts can be less sceptical.

The OECD also commented in relation to Trump’s increasingly protectionist policies stating: “trade protectionism remains a key risk that would negatively affect confidence, investment and jobs” for all 35 of the countries the organisation analyses. Most of these countries have recently had their growth predictions raised as well.

OECD states the global economy should grow by 3.9% this year, which again is an overall increase of 0.2% on its previous prediction.