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Canadian economy shrinks for the first time in eight months, hit by U.S. auto strike – Financial Post

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OTTAWA — Canada’s economy unexpectedly shrank by 0.1 per cent in October, the first monthly decline since February, partly because of a U.S. auto strike that hit manufacturing, Statistics Canada data indicated on Monday.

Analysts in a Reuters poll had forecast a gain of 0.1 per cent following a 0.1 per cent advance in September. Goods-producing industries posted a 0.5 per cent loss while service sectors were essentially unchanged.

October’s growth figures were the latest in a string of disappointing data that analysts say may prompt the Bank of Canada to mull a rate cut. The central bank has held its key rate unchanged since October 2018 even as several of its counterparts, including the U.S. Federal Reserve, have eased.

The manufacturing sector contracted by 1.4 per cent, the fourth decline in five months. Durable manufacturing dropped by 2.3 per cent as a strike by the United Auto Workers prompted some Canadian plants and parts producers to scale back production.

Retail trade fell by 1.1 per cent, the largest decline since March 2016, on broad-based weakness. Transportation and warehousing rose by 0.6 per cent on strength in the aviation sector, both in passengers and cargo.

© Thomson Reuters 2019

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Report: Women, diversity are key to rebuilding Canada's economy – Wealth Professional

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Climbing the ladder
Women and diverse groups are also facing struggles to climb the corporate ladder to senior leadership roles.

“While we are making some progress with women on corporate Boards, reported at 25.3% of directors, the study highlights this doesn’t hold true for racialized women, reported at just 1.2% of directors,” said  Zabeen Hirji, Executive  Advisor, Future of Work, Deloitte. “White women out-numbering racialized women on corporate boards in Toronto by 12 to 1. The talent is there, it is policies and practices that need to evolve. We need to cast a wider net.”

The challenges are particularly evident in science and technology sectors (STEM).

Occupations within some of the high-growth and high-income sectors reveal the disparity of women trying to advance in STEM fields, generally filling lower-level jobs compared to their higher-level male counterparts.

However, women have made inroads into highly paid professions such as medicine and law.

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Gautam Adani debunks GDP rhetoric, says India will be 2nd largest economy by 2050 – Deccan Herald

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Billionaire Gautam Adani has debunked the narrow fixation on GDP numbers, saying fundamentals are intact and India will be the second-largest economy by 2050 and has an edge over global peers in terms of business opportunities.

Speaking at the JP Morgan India Summit – Future in Focus, the Adani Group chairman said the AatmaNirbhar Bharat programme will be a game-changer.

“I will state without any hesitation – that – in my view – over the next three decades, India is the world’s greatest business opportunity,” he said.

India’s geostrategic position and massive market size give it an edge over its global peers amid the fundamental political realignment of nations taking shape, he said adding opportunities for India are likely to accelerate on the other side of the pandemic.

“For the sake of the fans of the GDP metric, let’s look at some statistics. The global GDP in 1990 was $38 trillion. Today, 30 years later, this number is $90 trillion. Projecting for another 30 years, in 2050 the global GDP is expected to be about $170 trillion with India becoming the second-largest economy in the world,” he said.

The Indian economy shrank by a record 23.9 per cent in the April-June quarter because of the Covid-19 pandemic and the lockdown that followed. The economy is projected to contract for the first time in four decades, in the full year to March 2021.

Also read: India’s economy to experience record contraction in 2020-21: S&P

But Adani said short-term setbacks due to a global crisis cannot be used to write off the country as its fundamentals remain intact.

“The current focus on standardised GDP predictions as against truly understanding what a nation could look like over a decade has unfortunately become one of the primary elements for measuring the health of an economy. In my view, patience and long-term planning and most importantly, an alignment with the government’s business agenda are what creates the greatest value,” he said.

Speaking of challenges holding back India, Adani said that India needs $1.5 to 2 trillion of capital over the next decade but despite key structural reforms such as the National Investment and Infrastructure Fund and Credit Enhancement Fund, capital structure challenges, and lack of empowered and independent regulators remain bottlenecks to nation-building and investment opportunities.

The first generation entrepreneur, who built India’s biggest infrastructure group with interests spanning from seaports to airports and energy, coaxed the audience to look at opportunities through his ‘optimist’ lenses.

“As an entrepreneur, I am an optimist, and therefore the lenses through which I see opportunities may be different than some of yours. I recognise that the view that you cannot build a long-term future on short-term thinking, may not be in alignment with the objectives of certain priorities of the investment community,” he said.

He told the forum to stop viewing all nations through old Western growth metrics.

Also read: Moody’s projects Indian economy to contract 11.5% this fiscal

“Democracy cannot take a cookie-cutter approach and we should accept that different nations will have their own flavour of democracy and capitalism.”

Stating that the AatmaNirbhar Bharat or self-reliant India programme will be a game-changer, he said India building a crumbling supply chain infrastructure that stood exposed to Covid-19, as also a strong head start in digital transformation will help re-build the economy. 

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India's central bank to keep rates on hold, provide economic forecasts – The Journal Pioneer

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By Swati Bhat

MUMBAI (Reuters) – The Reserve Bank of India is expected to keep key rates unchanged this week, but may for the first time since February provide guidance on how the economy is performing amid the coronavirus pandemic.

All 66 respondents in a Reuters poll expect the repo rate to remain unchanged at 4.0% after its policy review on Thursday, and a large majority see no cuts until the January-March quarter. The RBI will then likely stay on hold until the end of 2021.

The central bank must manage high retail inflation while keeping policy accommodative to support an economy which nosedived 23.9% last quarter, the weakest performance on record.

It has so far slashed rates by 115 basis points in response to the COVID-19 pandemic since late March.

“India’s inflation-constrained central bank is unlikely to deliver a rate cut, and we expect all policy rates to stay unchanged,” said Rahul Bajoria, economist with Barclays adding that the RBI will however provide economic projections.

India is gradually reopening its economy from a lockdown but economic activity remains depressed as coronavirus cases top six million, the second-highest globally.

The South Asian country was already facing a cyclical downturn before the pandemic struck and is now expected to mark its first full-year contraction since 1979 this year as millions are left unemployed in the world’s second-most populous country.

The RBI has so far refrained from providing any forecasts on growth or inflation due to the heightened uncertainty and risk of projections having to be revised frequently.

However, the central bank is required by law to provide economic forecasts once every six months.

“Data projections from the central bank will be critical, as it would lay out the RBI’s assessment of the extent of the current slowdown and the medium-term implications of the current crisis,” Bajoria said.

The RBI has maintained that it sees the current rise in inflation as transitional and expects to see prices come down, giving it room to reduce rates to support growth.

August inflation, at 6.69%, held above the top end of the RBI’s medium-term target range of 2-6% for the fifth consecutive month amid supply disruptions.

(Editing by Jacqueline Wong)

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