Buckle your proverbial seatbelts, because the global economy is heading for a rough patch, and Canada is set to get rocked.
Driving the news: The Organisation for Economic Co-operation and Development (OECD) revised its economic outlook for 2025, projecting global GDP growth to slip below 3% for the first time since 2020, thanks to U.S. tariffs. The report found that the slowdown would be concentrated mostly in the U.S., China, Mexico, and Canada.
Big picture: The OECD projects Canada’s GDP growth to fall from 1.5% in 2024 to just 1% this year, and 1.1% next year, as business investment takes a hit, consumer spending is impacted, and exports to the U.S. drop faster than an anvil falling on Wile E. Coyote.
- Tariffs will also cause headline inflation to rise slightly, though the OECD projects lower gas prices will help limit the rise.
Why it matters: The numbers aren’t shocking, and the OECD gives solutions to turn them around: policies focused on removing internal barriers, diversifying trade partners, and increasing infrastructure investment. Which is to say, stuff the feds already want to do.
Yes, but: Monday’s meeting between Prime Minister Mark Carney and the nation’s premiers, which was expected to result in agreement on concrete “nation-building” projects, ended without any major announcements. While Carney said the list of potential projects will be finalized this summer, discord over what projects do or don’t get fast-tracked could arise.—QH