Economy

BOJ may offer bleaker view on economy, Ukraine war adds to risks -sources – Financial Post

Published

3 years ago

March 7, 2022

TOKYO — The Bank of Japan may downgrade its economic assessment at next week’s policy meeting as a spike in Omicron COVID-19 infections dealt a bigger-than-expected blow to consumption, said four sources familiar with its thinking.

The central bank may also warn of heightening economic risks from the Ukraine crisis, which threatens to dent consumption and corporate profits through soaring energy costs, they said.

“After recovering late last year, consumption seems to have slumped as Omicron and coronavirus curbs kept people home,” said one of the sources, a view echoed by three more sources.

“The economy didn’t do well in the first quarter,” and may struggle to gain momentum due to the fallout from the war in Ukraine, a second source said.

At the two-day meeting ending on March 18, the BOJ will thus consider offering a bleaker view on the economy and consumption compared with its previous meeting in January, the sources said.

In January, the BOJ said the economy and consumption were “showing clearer signs of pick-up.”

The central bank, however, is likely to keep monetary policy steady next week and put off until a subsequent meeting in April a decision on whether to maintain its forecast that the economy is on track for a recovery, the sources said.

“There’s simply too much uncertainty now to gauge the impact on Japan’s economic outlook,” a third source said. The sources spoke on condition of anonymity because they are not authorized to speak publicly.

The persistent drag from the pandemic and rising commodity costs from the Ukraine crisis have cast doubt on the BOJ’s view the economy is likely to improve thanks to continued strength in global demand and an expected rebound in consumption.

Longer run, the BOJ expects robust corporate profits to boost capital expenditure and wages – a view also under threat as soaring raw material costs squeeze corporate profits.

After expanding an annualized 5.4% in October-December last year, Japan’s economic growth will likely grind to a near halt this quarter as COVID-19 curbs and supply constraints weigh on a fragile recovery, a Reuters poll showed.

The BOJ will conduct a quarterly review of its growth and inflation projections at its April 27-28 meeting.

(Reporting by Leika Kihara and Takahiko Wada; Editing by Toby Chopra and Emelia Sithole-Matarise)

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Economy

Federal money and sales taxes help pump up New Brunswick budget surplus

Published

14 hours ago

September 16, 2024

Anne Joseph

FREDERICTON – New Brunswick‘s finance minister says the province recorded a surplus of $500.8 million for the fiscal year that ended in March.

Ernie Steeves says the amount — more than 10 times higher than the province’s original $40.3-million budget projection for the 2023-24 fiscal year — was largely the result of a strong economy and population growth.

The report of a big surplus comes as the province prepares for an election campaign, which will officially start on Thursday and end with a vote on Oct. 21.

Steeves says growth of the surplus was fed by revenue from the Harmonized Sales Tax and federal money, especially for health-care funding.

Progressive Conservative Premier Blaine Higgs has promised to reduce the HST by two percentage points to 13 per cent if the party is elected to govern next month.

Meanwhile, the province’s net debt, according to the audited consolidated financial statements, has dropped from $12.3 billion in 2022-23 to $11.8 billion in the most recent fiscal year.

Liberal critic René Legacy says having a stronger balance sheet does not eliminate issues in health care, housing and education.

This report by The Canadian Press was first published Sept. 16, 2024.

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Economy

Liberals announce expansion to mortgage eligibility, draft rights for renters, buyers

Published

18 hours ago

September 16, 2024

Anne Joseph

OTTAWA – Finance Minister Chrystia Freeland says the government is making some changes to mortgage rules to help more Canadians to purchase their first home.

She says the changes will come into force in December and better reflect the housing market.

The price cap for insured mortgages will be boosted for the first time since 2012, moving to $1.5 million from $1 million, to allow more people to qualify for a mortgage with less than a 20 per cent down payment.

The government will also expand its 30-year mortgage amortization to include first-time homebuyers buying any type of home, as well as anybody buying a newly built home.

On Aug. 1 eligibility for the 30-year amortization was changed to include first-time buyers purchasing a newly-built home.

Justice Minister Arif Virani is also releasing drafts for a bill of rights for renters as well as one for homebuyers, both of which the government promised five months ago.

Virani says the government intends to work with provinces to prevent practices like renovictions, where landowners evict tenants and make minimal renovations and then seek higher rents.

The government touts today’s announced measures as the “boldest mortgage reforms in decades,” and it comes after a year of criticism over high housing costs.

The Liberals have been slumping in the polls for months, including among younger adults who say not being able to afford a house is one of their key concerns.

This report by The Canadian Press was first published Sept. 16, 2024.

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Economy

Statistics Canada says manufacturing sales up 1.4% in July at $71B

Published

18 hours ago

September 16, 2024

Anne Joseph

OTTAWA – Statistics Canada says manufacturing sales rose 1.4 per cent to $71 billion in July, helped by higher sales in the petroleum and coal and chemical product subsectors.

The increase followed a 1.7 per cent decrease in June.

The agency says sales in the petroleum and coal product subsector gained 6.7 per cent to total $8.6 billion in July as most refineries sold more, helped by higher prices and demand.

Chemical product sales rose 5.3 per cent to $5.6 billion in July, boosted by increased sales of pharmaceutical and medicine products.

Sales of wood products fell 4.8 per cent for the month to $2.9 billion, the lowest level since May 2023.

In constant dollar terms, overall manufacturing sales rose 0.9 per cent in July.

This report by The Canadian Press was first published Sept. 16, 2024.

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