Canada’s economy could rebound faster than expected if consumer spending jumps in the wake of a successful coronavirus vaccination effort, Bank of Canada Governor Tiff Macklem said on Thursday.
On the other hand, if the economy weakens amid a second wave of infections, Macklem indicated the central bank could if necessary cut already record low interest rates.
In late October, the bank said it assumed a vaccine would not be widely available until mid-2022. Since then, several manufacturers have announced potential vaccines that could be distributed starting early next year.
“It is possible, especially when there is a vaccine, that households will decide to spend more than we have forecast and if that happens the economy will rebound more quickly,” Macklem said in response to questions from the House of Commons finance committee. He described the news about vaccines as promising.
In late October, the bank forecast the economy would not fully recover until some time in 2023, a forecast Macklem repeated in his opening remarks.
The path to recovery still faced risks, he said. Earlier this year the bank slashed its key interest rate to 0.25 per cent.
“We could potentially lower the effective lower bound, even without going negative. It’s at 25 basis points, it could be a little bit lower,” Macklem said, repeating that negative interest rates would not be helpful.
The U.S. Federal Reserve has a target for its key rate of 0 to 0.25 per cent. The Reserve Bank of Australia this month cut its policy rate to 0.1 per cent.
Some other central banks also have benchmark rate that are less than 0.25 per cent, such as the European Central Bank and the Bank of England.
“We want to be very clear – Canadians can be confident that borrowing costs are going to remain very low for a long time,” Macklem said.
Source: – Global News
Tunisians protest as COVID surges, economy suffers | Coronavirus pandemic News – Al Jazeera English
Police used pepper spray on protesters in Tunis who threw stones and demanded Prime Minister Hichem Mechichi quit, parliament be dissolved.
Police and protesters have clashed in several Tunisian cities as demonstrators demanding the government step down after a spike in COVID-19 cases that has aggravated economic troubles attacked offices of Ennahda, the biggest party in parliament.
In Tunis on Sunday, police used pepper spray against protesters who threw stones and shouted slogans demanding that Prime Minister Hichem Mechichi quit and parliament be dissolved.
Witnesses said protesters stormed or tried to storm Ennahda offices in Monastir, Sfax, El Kef and Sousse, while in Touzeur they set fire to the party’s local headquarters.
The protests raise pressure on a fragile government that is enmeshed in a political struggle with President Kais Saied, who is trying to avert a looming fiscal crisis amid a weeks-long spike in COVID-19 cases and increased death rates.
The pandemic has hit Tunisia as it struggles to lift an economy that has suffered since its 2011 revolution, undermining public support for democracy as unemployment surged and state services declined.
“Our patience has run out … there are no solutions for the unemployed,” Nourredine Selmi, 28, a jobless protester, told Reuters news agency. “They cannot control the epidemic … They can’t give us vaccines.”
Last week, Mechichi sacked the health minister after chaotic scenes at walk-in vaccination centres during the Muslim Eid al-Adha holiday, where large crowds queued for inadequate supplies of vaccine.
The ministry said earlier this month that Tunisia’s health system had “collapsed” under the weight of the pandemic, which has caused more than 17,000 deaths in a population of about 12 million.
After a year of wrangling with Mechichi and the leader of Ennahda, Rached Ghannouchi, who is also parliament speaker, President Saied declared the army would take over the pandemic response.
Some analysts saw the move by Saied as an attempt to expand his powers beyond the foreign and military role assigned to the president in the 2014 constitution.
Government paralysis could derail efforts to negotiate an International Monetary Fund loan seen as crucial to stabilising state finances but which could also involve spending cuts that would aggravate economic pain for ordinary people.
Biden Faces Fresh Challenges on Covid-19, Economy – The Wall Street Journal
WASHINGTON—President Biden took office with the goals of overcoming the coronavirus pandemic, spurring economic growth and winning legislative approval for trillions in new spending.
Six months in, all three of his major objectives are being tested.
Covid-19 cases and hospitalizations are on the rise, spurred by the Delta variant and vaccine resistance from a slice of the population. Concerns over the spread of the pandemic have caused some turbulence in the financial markets and consumer prices are ticking up, prompting warnings about long-term inflation. A bipartisan infrastructure deal and a broader Democratic spending bill remain deep in negotiations and a long way from Mr. Biden’s desk.
During a cabinet meeting last week, the president in his public remarks highlighted his work so far but acknowledged some of the current pressure points. “I know it seems like a constant uphill climb…we’re making progress, but we’ve got a way to go yet,” Mr. Biden said of the vaccination effort.
He emphasized the need for “constant vigilance” against the virus, asserted that his economic program would “generate significant continued economic growth” and defended his infrastructure and antipoverty legislative plans as popular.
Since Mr. Biden took office, more than three million jobs have been created and nearly 60% of American adults are now fully vaccinated. When he reached an agreement with Republicans in June on a bipartisan framework for a roughly $1 trillion infrastructure proposal, he said it showed that bipartisanship was possible.
Now, Mr. Biden appears to be moving into a more challenging phase of his presidency. A Gallup poll released Friday put Mr. Biden’s job approval at 50%, the lowest mark since he took office. He is trying to convince skeptics—many of whom don’t support him politically—to get vaccines. He is seeking to ease public worries about price increases. And after investing much time in a bipartisan framework on infrastructure reached with Republican and Democratic senators, the White House now must help steer the bill to the finish line.
A new poll from ABC News/Ipsos released Sunday found that 45% of Americans were optimistic about the direction of the country—a drop from 64% expressing optimism in the spring.
Republicans say Mr. Biden’s policies will damage the economy. House Minority Leader Kevin McCarthy (R., Calif.) tweeted recently that “the Democrats’ inflation is destroying Americans’ hope for financial security.” And Senate Minority Leader Mitch McConnell (R., Ky.) has taken to calling the spending plans a “reckless tax and spending spree.”
Mr. Biden’s allies note that part of governing is dealing with the unexpected, and they give him credit for managing the pandemic and pushing his agenda in a divided Congress.
“All presidents have to deal with these external factors that just careen into their presidency,” said Sen. Ed Markey (D., Mass.). “But on this big agenda which he has for infrastructure and for family, he’s right on pace.”
The White House continues to express optimism. White House senior adviser Anita Dunn briefed Democratic lawmakers Thursday about the president’s economic plans, with a slideshow that emphasized the administration’s arguments that the agenda will boost jobs and help working families, including polling data showing the popularity of the initiatives.
But the White House acknowledges the depth of Mr. Biden’s challenges. “He has a lot on his plate, and he is fully focused on all of it. And so we just keep pressing on,” senior adviser Mike Donilon said during a briefing call with reporters.
On vaccinations, the White House has been on the defensive in recent days as cases rise again after having fallen earlier in the year, and amid news of breakthrough infections at the White House and the Capitol. The country still hasn’t quite reached Mr. Biden’s goal, initially set for July 4, of reaching 70% of Americans with at least one dose of the Covid-19 vaccine. So far, over 68% of adults aged 18 and older have received one shot and nearly 60% have been fully vaccinated.
Mr. Biden has been asked repeatedly whether mask guidelines should be reconsidered. Some local governments have reimposed masking rules as the spread of the highly contagious Delta variant drives up cases in every state in the country.
Budget reconciliation may offer Democrats a way to sidestep some partisan gridlock and advance President Biden’s policy objectives. WSJ explains how the process works and why divisions in the party could scuttle the process. Photo Illustration: Carlos Waters / WSJ
The Wall Street Journal Interactive Edition
Before a meeting at the White House on Thursday, he said the administration would follow the scientific advice. He repeated his argument that the current situation is a “pandemic among the non-vaccinated,” adding that the vaccinated were protected against infection in most cases, and from serious illness if they do contract the virus.
Mr. Biden has also tussled with
over the social media company’s role in policing misinformation about Covid-19 and vaccines.
William Galston, a former aide to President Bill Clinton, said the president faced risks if he wasn’t able to meet his public goals.
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“Expectations have been raised,” he said. “If those expectations are dashed, my fear is there could be a reaction.”
White House officials have long said the pandemic and economy are intertwined, and success in vaccinations would bolster job growth. The president has delivered remarks at the start of each month to highlight the rebound in hiring—with employers adding an average of about 600,000 jobs a month since the start of his presidency.
But the turbulence and polls showing growing concern over inflation have prompted Mr. Biden to push back against critics who say his spending policies, and pursuit of tax increases, are the wrong economic prescription.
He has acknowledged inflation in the short term but asserted that it won’t be a long-term issue for Americans—a message that could become difficult to maintain if consumers continue to face higher prices in the coming months.
“People are paying more for everything—when they can get it. If there’s one thing Americans don’t like doing, it’s standing in lines and paying more for something,” said
a Virginia-based Republican strategist. Virginia holds a gubernatorial election in November that could serve as an early test of Mr. Biden’s political strength.
The White House views Mr. Biden’s legislative agenda as the best way to position Democrats in next year’s midterms. Mr. Biden notched an early victory with the passage of a $1.9 trillion Covid-19 relief law during his first 100 days and has used executive action to overturn many actions taken by former President Donald Trump.
Enacting the next major planks of his agenda rests on whether he can secure support for a roughly $1 trillion infrastructure package and a separate $3.5 trillion measure to fund projects to address climate change and provide access to education and affordable child care. Each will test Mr. Biden’s deal-making skills: The first package would need the support of at least 10 Republicans to advance in the Senate, while the second will require unanimous Democratic support to make it through the chamber.
Don’t be fooled – the UK economy is not having a rerun of the 1970s – The Guardian
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Tunisians protest as COVID surges, economy suffers | Coronavirus pandemic News – Al Jazeera English
Pakistan deeply appreciates US announcing it will send 3 million Moderna doses through COVAX: FO – Geo News
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