BUENOS AIRES, Argentina — Argentina’s peso fell and stock prices dipped Monday after left-leaning Silvina Batakis was named economy minister following the surprise resignation of her more moderate predecessor over the weekend as the country struggles with economic woes.
Batakis was named late Sunday to take over from Martín Guzmán, who was largely seen as a moderate voice within President Alberto Fernández’s Cabinet. Guzmán had been the target of strong criticism from more left-leaning elements of the governing coalition, including Vice President Cristina Fernández, who is not related to the president.
The peso’s value was down 18% at one point in the informal market Monday, reaching 280 per dollar, before recovering some late in the day. Prices for government bonds plunged as much as 10%, signaling fears of worsening inflation, while stocks also saw declines.
The historic volatility of the peso means Argentines largely save in U.S. dollars and the exchange rate is closely followed as a general barometer for the economy.
Some analysts cautioned it was too early to say if the peso is at a new low because trading activity was very light Monday, indicating that many people might be taking a wait-and-see attitude.
“These are prices that must be taken with a grain of salt today,” said Gustavo Ber, an economist who heads local consultancy Estudio Ber.
But others said it was a signal that after serveral economic crashes in recent decades, Argentines are worried that inflation already running at an annual rate of 60% will worsen under Batakis, who was sworn in late Monday afternoon.
“This is what we expected, a pretty strong reaction from the markets,” said Marcos Buscaglia, an economist who is a partner at local consulting firm Alberdi Partners.
Argentines crowded into stores over the weekend to buy big ticket items like refrigerators and ovens.
“More inflation is on the way,” Buscaglia predicted, saying the appointment of Batakis indicates that the policy preferences of the left-leaning vice president are predominating in the government.
Fernández, who herself was Argentina’s president in 2007-2015 and continues to hold a strong base of support, has publicly criticized austerity efforts meant to try to tame inflation.
Guzmán, who was seen as a close ally of the president, resigned Saturday with a seven-page letter posted on Twitter at a time of tension in the governing coalition about how to deal with the economic problems gripping the country.
In addition to inflation, Batakis will have to deal with an economy in which about four of every 10 Argentines are poor and the Central Bank is running perilously low on hard currency reserves.
Batakis has a long history of public service and was the economy minister of Buenos Aires province, the country’s most populous district, in 2011-2015 under then Gov. Daniel Scioli, who was recently named the federal production minister.
A big question mark involves the future of the country’s recent deal with the International Monetary Fund to restructure $44 billion in debt.
Many left-leaning members of the governing coalition have publicly opposed the IMF agreement, saying it involves too many concessions to the multilateral institution that will hamper growth.
While the country waits for Batakis to lay out her plan for the future, some analysts caution her path forward is difficult.
“One would expect the new minister would try to calm the financial market first, and then order the macro (economy),” said Matias Carugati, an economist with Consultora Seido. “But it really is difficult to know today whether that will happen, considering we do not have a lot of information about the government plan. They’re assuring continuity with respect to what Guzmán was doing, but it was precisely that plan that led to his resignation.”
OTTAWA – Canada’s unemployment rate held steady at 6.5 per cent last month as hiring remained weak across the economy.
Statistics Canada’s labour force survey on Friday said employment rose by a modest 15,000 jobs in October.
Business, building and support services saw the largest gain in employment.
Meanwhile, finance, insurance, real estate, rental and leasing experienced the largest decline.
Many economists see weakness in the job market continuing in the short term, before the Bank of Canada’s interest rate cuts spark a rebound in economic growth next year.
Despite ongoing softness in the labour market, however, strong wage growth has raged on in Canada. Average hourly wages in October grew 4.9 per cent from a year ago, reaching $35.76.
Friday’s report also shed some light on the financial health of households.
According to the agency, 28.8 per cent of Canadians aged 15 or older were living in a household that had difficulty meeting financial needs – like food and housing – in the previous four weeks.
That was down from 33.1 per cent in October 2023 and 35.5 per cent in October 2022, but still above the 20.4 per cent figure recorded in October 2020.
People living in a rented home were more likely to report difficulty meeting financial needs, with nearly four in 10 reporting that was the case.
That compares with just under a quarter of those living in an owned home by a household member.
Immigrants were also more likely to report facing financial strain last month, with about four out of 10 immigrants who landed in the last year doing so.
That compares with about three in 10 more established immigrants and one in four of people born in Canada.
This report by The Canadian Press was first published Nov. 8, 2024.
The Canadian Institute for Health Information says health-care spending in Canada is projected to reach a new high in 2024.
The annual report released Thursday says total health spending is expected to hit $372 billion, or $9,054 per Canadian.
CIHI’s national analysis predicts expenditures will rise by 5.7 per cent in 2024, compared to 4.5 per cent in 2023 and 1.7 per cent in 2022.
This year’s health spending is estimated to represent 12.4 per cent of Canada’s gross domestic product. Excluding two years of the pandemic, it would be the highest ratio in the country’s history.
While it’s not unusual for health expenditures to outpace economic growth, the report says this could be the case for the next several years due to Canada’s growing population and its aging demographic.
Canada’s per capita spending on health care in 2022 was among the highest in the world, but still less than countries such as the United States and Sweden.
The report notes that the Canadian dental and pharmacare plans could push health-care spending even further as more people who previously couldn’t afford these services start using them.
This report by The Canadian Press was first published Nov. 7, 2024.
Canadian Press health coverage receives support through a partnership with the Canadian Medical Association. CP is solely responsible for this content.
As Canadians wake up to news that Donald Trump will return to the White House, the president-elect’s protectionist stance is casting a spotlight on what effect his second term will have on Canada-U.S. economic ties.
Some Canadian business leaders have expressed worry over Trump’s promise to introduce a universal 10 per cent tariff on all American imports.
A Canadian Chamber of Commerce report released last month suggested those tariffs would shrink the Canadian economy, resulting in around $30 billion per year in economic costs.
More than 77 per cent of Canadian exports go to the U.S.
Canada’s manufacturing sector faces the biggest risk should Trump push forward on imposing broad tariffs, said Canadian Manufacturers and Exporters president and CEO Dennis Darby. He said the sector is the “most trade-exposed” within Canada.
“It’s in the U.S.’s best interest, it’s in our best interest, but most importantly for consumers across North America, that we’re able to trade goods, materials, ingredients, as we have under the trade agreements,” Darby said in an interview.
“It’s a more complex or complicated outcome than it would have been with the Democrats, but we’ve had to deal with this before and we’re going to do our best to deal with it again.”
American economists have also warned Trump’s plan could cause inflation and possibly a recession, which could have ripple effects in Canada.
It’s consumers who will ultimately feel the burden of any inflationary effect caused by broad tariffs, said Darby.
“A tariff tends to raise costs, and it ultimately raises prices, so that’s something that we have to be prepared for,” he said.
“It could tilt production mandates. A tariff makes goods more expensive, but on the same token, it also will make inputs for the U.S. more expensive.”
A report last month by TD economist Marc Ercolao said research shows a full-scale implementation of Trump’s tariff plan could lead to a near-five per cent reduction in Canadian export volumes to the U.S. by early-2027, relative to current baseline forecasts.
Retaliation by Canada would also increase costs for domestic producers, and push import volumes lower in the process.
“Slowing import activity mitigates some of the negative net trade impact on total GDP enough to avoid a technical recession, but still produces a period of extended stagnation through 2025 and 2026,” Ercolao said.
Since the Canada-United States-Mexico Agreement came into effect in 2020, trade between Canada and the U.S. has surged by 46 per cent, according to the Toronto Region Board of Trade.
With that deal is up for review in 2026, Canadian Chamber of Commerce president and CEO Candace Laing said the Canadian government “must collaborate effectively with the Trump administration to preserve and strengthen our bilateral economic partnership.”
“With an impressive $3.6 billion in daily trade, Canada and the United States are each other’s closest international partners. The secure and efficient flow of goods and people across our border … remains essential for the economies of both countries,” she said in a statement.
“By resisting tariffs and trade barriers that will only raise prices and hurt consumers in both countries, Canada and the United States can strengthen resilient cross-border supply chains that enhance our shared economic security.”
This report by The Canadian Press was first published Nov. 6, 2024.
