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Canada budget deficit surges to C$232 billion in first eight months of 2020/21

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OTTAWA, January 29 (Reuters) – – Canada‘s budget deficit from April to November surged to C$232.02 billion ($182.03 billion) from C$11.75 billion a year earlier, as the government spent heavily to combat the economic impact of the coronavirus pandemic, the finance ministry said on Friday.

“The unprecedented shift in the government’s financial results reflects the severe deterioration in the economic situation and temporary measures implemented,” it said in a statement.

Revenues fell 17.4% on lower sales tax and corporate tax receipts, with other revenues down on premiums paid by the Bank of Canada on its secondary market purchases of government securities.

Program expenses, meanwhile, jumped 89.5%, largely on pandemic aide transfers to individuals, businesses and other levels of government, the finance ministry said.

November’s deficit jumped to C$15.40 billion compared with a shortfall of C$2.70 billion in November 2019.

 

 

(Reporting by Julie Gordon; Editing by David Ljunggren; julie.gordon@tr.com)

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Freaking out about the economy? Let's talk. – The Washington Post

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Businesses and consumers are increasingly worried the U.S. economy will tip into a recession. There are already growing signs that Americans are starting to spend less on dining out, vacation plans and even such routine services as manicures and haircuts. Today on “Post Reports,” we take some of your questions about the economy, and get answers from economics correspondent Abha Bhattarai, personal finance columnist Michelle Singletary and reporter Rachel Siegel, who covers the Federal Reserve.

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Economy

Household differences and why they matter – Bank of Canada

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The COVID‑19 pandemic is a good example of a downturn that affected Canadians in different ways.

Most people who could work from home during the pandemic kept their jobs and experienced little or no change to their income. At the same time, public health measures to contain the spread of the virus hit some services—such as restaurants, accommodation, travel and entertainment—particularly hard. Many people working in these sectors lost their regular source of income. Low-wage workers, especially women and young people, felt this impact more.

The unusual policy supports that the federal government put in place during the pandemic also had uneven effects. Some people received enough financial support to make up for their lost wages. Others, however, did not. Similarly, while some households with fewer opportunities to spend were able to reduce their debt, others took on more debt.

By early 2022, most of the pandemic’s uneven impacts on employment were reversed. As well, households across income groups were, on average, in healthier financial positions than they were before the pandemic.

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Argentina has new economy minister after abrupt resignation – Financial Post

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BUENOS AIRES (AP) — Argentina got a new economy minister late Sunday, a day after the abrupt resignation of her predecessor shook the governing coalition at a time it was already facinga crisis of unity.

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Gabriela Cerruti, the presidency’s spokesperson, wrote on Twitter late Sunday that Silvina Batakis will now head the Economy Ministry, replacing Martin Guzman.

The pick could be crucial for the administration of President Alberto Fernandez as it faces sharp internal divisions while Argentina is undergoing economic turmoil.

Batakis will be responsible for managing an economy burdened with inflation running at an annual rate above 60% and will play a key role in determining 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 oppose the IMF agreement.

Batakis was the economy minister of Buenos Aires province, the country’s most populous district, from 2011 to 2015 under then-Gov. Daniel Scioli, who was recently named the federal production minister.

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Guzman quit unexpectedly Saturday, posting his seven-page resignation letter on Twitter, and apponting a successor before the markets opened Monday was seen as particularly important to avoid a further slide by Argentina’s peso, which recently hit an all-time low against the dollar.

The economy also has been disrupted by trucker strikes over shortage of diesel.

Guzman was largely unknown when he became minister and was seen as a moderate in the governing coalition, which includes more left-leaning elements allied with Vice President Cristina Fernandez, a former president who still has a strong base of support.

Batakis, on the other hand, has a long history of public service and is seen as close to the vice president and her allies.

The vice president, who is not related to the president, has recently taken to publicly criticizing the administration’s economic policies in high-profile speeches that have put a spotlight on the rifts within the governing coalition.

Guzman’s resignation letter, which was released as the vice president was giving a speech in which she again criticized economic policy, suggested he stepped down at least in part due to a lack of political support.

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