Economy

Economy will grow in 2021 if there isn't another national shutdown, forecast says – BNNBloomberg.ca

Published

4 years ago

June 22, 2020

OTTAWA — Canada may have already begun to recover from the deepest recession on record, assuming the country can avoid another national COVID-related shutdown, a private sector forecast said Monday.

The Conference Board of Canada report estimates the economy will shrink 8.2 per cent this year, then return to growth with a 6.7-per-cent rise in 2021 and 4.8-per-cent in 2022 — provided there are no more national shutdowns.

The outlook is at the optimistic range of the Bank of Canada’s most recent estimates, but is based on 1,200 variables and the expertise of its analytical team, said Alicia Macdonald, associate director of economic forecasting for the Conference Board.

Macdonald also warned that there won’t be a sharp “V” recovery but said a gradual “U” recovery is likely.

Meanwhile, Bank of Canada governor Tiff Macklem said in a webcast speech Monday that the bank expects economic growth will resume in the third quarter. Even so, it also warned the recovery period “will likely be prolonged and bumpy, with the potential for setbacks along the way.”

The Conference Board cautions that its forecast depends on “the country’s ability to avoid a second severe outbreak of the COVID-19 virus” that would require another national shutdown. It expects many companies can weather the storm of additional outbreaks, however.

“I think we’ve learned a lot of lessons from our experience from the first lockdown,” Macdonald said in an interview.

Businesses have more techniques and tools — such as plastic barriers to separate customers from staff — and more guidelines from governments in how to operate safely, she said.

“So we think that, should a second wave come in the fall, they’ll be better prepared to handle it this time around.”

The Conference Board projects the unemployment rate will peak at 13.7 per cent in the second quarter ending June 30, the highest since comparable data was first recorded in 1976.

But the report says the addition of nearly 300,000 jobs in May and continued easing of restrictions in June probably indicate the pandemic’s worst impact on the labour market has passed.

It’s projecting the addition of another 1.3 million jobs in the July to September quarter, dropping the national unemployment rate to 10.5 per cent.

The Conference Board says that if the country can avoid a second national shutdown, Canada’s economy could grow by 6.7 per cent in 2021 and by 4.8 per cent in 2022.

Let’s block ads! (Why?)

Source link

Economy

Energy stocks help lift S&P/TSX composite, U.S. stock markets also up

Published

10 hours ago

September 17, 2024

Anne Joseph

TORONTO – Canada’s main stock index was higher in late-morning trading, helped by strength in energy stocks, while U.S. stock markets also moved up.

The S&P/TSX composite index was up 34.91 points at 23,736.98.

In New York, the Dow Jones industrial average was up 178.05 points at 41,800.13. The S&P 500 index was up 28.38 points at 5,661.47, while the Nasdaq composite was up 133.17 points at 17,725.30.

The Canadian dollar traded for 73.56 cents US compared with 73.57 cents US on Monday.

The November crude oil contract was up 68 cents at US$69.70 per barrel and the October natural gas contract was up three cents at US$2.40 per mmBTU.

The December gold contract was down US$7.80 at US$2,601.10 an ounce and the December copper contract was up a penny at US$4.28 a pound.

This report by The Canadian Press was first published Sept. 17, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

Source link

Economy

Canada’s inflation rate hits 2% target, reaches lowest level in more than three years

Published

11 hours ago

September 17, 2024

Anne Joseph

OTTAWA – Canada’s inflation rate fell to two per cent last month, finally hitting the Bank of Canada’s target after a tumultuous battle with skyrocketing price growth.

The annual inflation rate fell from 2.5 per cent in July to reach the lowest level since February 2021.

Statistics Canada’s consumer price index report on Tuesday attributed the slowdown in part to lower gasoline prices.

Clothing and footwear prices also decreased on a month-over-month basis, marking the first decline in the month of August since 1971 as retailers offered larger discounts to entice shoppers amid slowing demand.

The Bank of Canada’s preferred core measures of inflation, which strip out volatility in prices, also edged down in August.

The marked slowdown in price growth last month was steeper than the 2.1 per cent annual increase forecasters were expecting ahead of Tuesday’s release and will likely spark speculation of a larger interest rate cut next month from the Bank of Canada.

“Inflation remains unthreatening and the Bank of Canada should now focus on trying to stimulate the economy and halting the upward climb in the unemployment rate,” wrote CIBC senior economist Andrew Grantham.

Benjamin Reitzes, managing director of Canadian rates and macro strategist at BMO, said Tuesday’s figures “tilt the scales” slightly in favour of more aggressive cuts, though he noted the Bank of Canada will have one more inflation reading before its October rate announcement.

“If we get another big downside surprise, calls for a 50 basis-point cut will only grow louder,” wrote Reitzes in a client note.

The central bank began rapidly hiking interest rates in March 2022 in response to runaway inflation, which peaked at a whopping 8.1 per cent that summer.

The central bank increased its key lending rate to five per cent and held it at that level until June 2024, when it delivered its first rate cut in four years.

A combination of recovered global supply chains and high interest rates have helped cool price growth in Canada and around the world.

Bank of Canada governor Tiff Macklem recently signalled that the central bank is ready to increase the size of its interest rate cuts, if inflation or the economy slow by more than expected.

Its key lending rate currently stands at 4.25 per cent.

CIBC is forecasting the central bank will cut its key rate by two percentage points between now and the middle of next year.

The U.S. Federal Reserve is also expected on Wednesday to deliver its first interest rate cut in four years.

This report by The Canadian Press was first published Sept. 17, 2024.

Source link

Economy

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

Published

1 day 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.

Source link