Connect with us

Economy

Federal budget needs to focus on post-COVID economic growth, Freeland says – Globalnews.ca

Published

 on


Canada’s finance minister laid out the broad strokes of this year’s federal budget, saying she wants to boost the country’s economic potential while minding inflation rates not seen in 30 years.

Chrystia Freeland also said the budget would address housing affordability concerns, indicating the document could include a slew of measures to crack down on housing investors that were outlined in her marching orders from the prime minister.

Read more:

Inflation hits Canadians already struggling with groceries, gas hardest: experts

During a late afternoon news conference where she launched pre-budget consultations that run until late February, Freeland focused her comments on the need for the budget to make the country more competitive and innovative.

She also noted a need for the budget to help fund the transition to a green economy, whose costs could be steep, and move beyond the recent focus on reducing greenhouse gas emissions.

“When I look at what I want to have in the budget, I want to have measures that increase the ability of Canada to grow really, really strongly post-COVID,” Freeland said.

“An economy which is expanding is an economy which can really create prosperity for all of its people.”


Click to play video: 'Canada’s fiscal update includes future spending in response to COVID-19: Freeland'



2:41
Canada’s fiscal update includes future spending in response to COVID-19: Freeland


Canada’s fiscal update includes future spending in response to COVID-19: Freeland – Dec 14, 2021

Freeland said a growing economy would help keep federal finances on solid footing after an expensive two years when the treasury has pumped out unprecedented aid to combat the economic fallout from COVID-19.

The Finance Department is projecting the deficit this year to hit $144.5 billion, one year after a shortfall of $327.7 billion. The deficit for the next fiscal year, starting in April, is projected to hit $58.4 billion, not including any new spending promises in the budget.

Read more:

Feds trim budget deficit to $73.7 billion from April to November

Speaking to the House of Commons finance committee earlier Monday, parliamentary budget officer Yves Giroux said he expected deficits to be the norm for the coming years.

That’s not necessarily a problem, he said, so long as the deficits are “relatively small” and the economy grows, bringing in more in federal revenues to pay for the increased costs.

The risk with larger federal deficits comes down to where the government spends its money, Giroux said. If the spending doesn’t create extra productive capacity in the economy and instead stimulates demand, “it can lead to inflationary pressures,” he said.


Click to play video: 'Bank of Canada holds interest rates for now, signalling hikes to come'



1:31
Bank of Canada holds interest rates for now, signalling hikes to come


Bank of Canada holds interest rates for now, signalling hikes to come

The Bank of Canada said last week the economy appears to have hit its productive capacity, leading to a scenario where too much government stimulus could boost consumer spending and add to inflation strains.

Freeland said the government would be mindful of higher inflation rates as she crafted her spending plan.

Separately Monday, Giroux’s office projected that the government’s hiring program would fall well short of what’s budgeted to provide subsidies for eligible businesses that expand their payroll.

While the government has budgeted almost $2.8 billion in subsidies, the budget office projects total subsidies will only hit $814 million.

The difference comes down in part to how the government and PBO expect the economy, and businesses, to fare in the coming months.

The budget office noted in its report that there is some uncertainty about the pace of economic growth, notably the potential impacts of COVID-19 in the future.

© 2022 The Canadian Press

Adblock test (Why?)



Source link

Continue Reading

Economy

Arabs believe economy is weak under democracy – BBC

Published

 on


Illustration of men and women

Arabs are losing faith in democracy to deliver economic stability across the Middle East and North Africa, according to a major new survey.

Nearly 23,000 people were interviewed across nine countries and the Palestinian territories for BBC News Arabic by the Arab Barometer network.

Most agreed with the statement that an economy is weak under a democracy.

The findings come just over a decade after the so-called Arab Spring protests called for democratic change.

Less than two years after the protests, just one of those countries – Tunisia – remained a democracy, but a draft constitution published last week could push the country back towards authoritarianism, if approved.

Michael Robbins, director of Arab Barometer, a research network based at Princeton University which worked with universities and polling organisations in the Middle East and North Africa to conduct the survey between late 2021 and Spring 2022, says there has been a regional shift in views on democracy since the last survey in 2018/19.

“There’s a growing realisation that democracy is not a perfect form of government, and it won’t fix everything,” he says.

“What we see across the region is people going hungry, people need bread, people are frustrated with the systems that they have.”

Chart showing the proportion of people who believe that the economy is weak under a democracy. In all eight locations, there has been a rise since the previous survey in 2018-2019.

Across most of the surveyed countries, more than half of respondents, on average, agree with the statement that the economy is weak under a democratic system.

In every country surveyed, more than half also say they either agree or strongly agree that they are more concerned about the effectiveness of their government’s policies, than they are about the type of government.

Chart showing the proportion of people who agree with the statement: As long as a government can solve our country's economic problem, it does not matter what kind of government we have. In every location, at least 60% of respondents agree. Iraq is the highest, with 79% followed by Tunisia and Libya with 77%

According to the EIU Democracy Index, the Middle East and North Africa is the lowest ranked of all regions covered in the index – Israel is classed as a “flawed democracy”, Tunisia and Morocco are classed as “hybrid regimes”, and the rest of the region is classed as “authoritarian”.

In seven countries and the Palestinian territories, more than half of respondents to the Arab Barometer survey agree with the statement that their country needs a leader who can “bend the rules” if necessary to get things done. Only in Morocco do fewer than half agree with that statement. However there is also a sizeable proportion of people disagreeing with the statement in the Palestinian territories, Jordan, and Sudan.

In Tunisia, eight in 10 of those surveyed agree with the statement, with nine in 10 saying they supported President’s Saied’s decision to sack the government and suspend parliament in July 2021, which his opponents denounced as a coup but he said was necessary to overhaul a corrupt political system.

Chart showing split responses to the statement: This country needs a leader who can bend the rules to get things done. Iraq had the highest proportion who agree (87%) with only 13% who disagree. Followed by Tunisia and Lebanon. In Morocco and the Palestinian Territories, the responses were more evenly split.

Tunisia was the only country that managed to form a lasting democratic government following the 2011 Arab Spring uprisings. However, Tunisia appears to be slipping back into an authoritarian rule under President Saied. According to the EIU democracy index for 2021, the country fell 21 places in the rankings and has been reclassified as a “hybrid regime” rather than a “flawed democracy”.

The survey in Tunisia was conducted between October and November 2021. Since then there have been protests against the president, as he has tightened his grip on power by dissolving parliament, taking control of the electoral commission, and pressed ahead with holding a referendum on a new constitution which many say will boost his authority. The country’s economy has meanwhile sunk deeper into crisis.

“Now, unfortunately, for Tunisia, it’s reverting to authoritarianism, or what we call democratic backsliding, which is a trend across the world today,” says Amaney Jamal, co-founder of Arab Barometer and dean of the Princeton School of Public and International Affairs.

“I think one of the key drivers is not a commitment to authoritarianism or an authoritarian political culture, it’s really a belief now that democracy has failed economically in Tunisia.”

Chart showing how different challenges are perceived in each location. The economic situation is seen as the greatest challenge in eight of 10 locations, whereas Covid-19 is only seen as the second-largest in 3. Corruption and Instability rank lower in all locations apart from Libya.

The economic situation is seen as the most pressing challenge for seven countries and the Palestinian territories, ahead of corruption, instability, and the spread of Covid-19.

Only in two countries is the economic situation not seen as the most crucial issue – in Iraq, where it is corruption, and in war-torn Libya, where it is instability.

At least one in three people in every country surveyed agree with the statement that, over the past year, they ran out of food before they next had sufficient funds to buy more.

Chart showing how many people were unable to keep food on the table before getting enough money to buy more. The Palestinian Territories and Morocco had the lowest proportion, but still higher than one in three. Egypt had the highest proportion with more than two in three people (68%) saying this happened sometimes or often.

The struggle to keep food on the table was most acutely felt in Egypt and Mauritania, where around two in three people said this happened sometimes or often.

The survey was for the most part conducted before Russia’s invasion of Ukraine in February, which has further exacerbated food insecurity across the region – particularly for Egypt, Libya, and Tunisia – which heavily rely on Russian and Ukrainian wheat exports.

The survey’s respondents who reported being unable to buy more food when they ran out were less supportive of democracy in a number of the countries surveyed, especially in Sudan, Mauritania, and Morocco.

Chart comparing the proportion of respondents who believe the economy is currently good to those who believe it will improve in 2-3 years, by country. In Lebanon, a mere half a percent of all respondents would describe the economy is good, but they show more optimism for the future with 17% who believe the situation will improve. In Egypt, which has the most positive view of the present economy, 45% of respondents believe the situation is currently good and 50% believe it will improve. Tunisia has a dim view of the current economy (only 14% think it is good) but has the highest level of optimism for the future - some 61% of people agree.

The economic outlook is bleak across the region, with fewer than half of all respondents willing to describe the economic situation in their country as good.

Lebanon is ranked lowest out of all the countries in the survey, with less than 1% of Lebanese questioned saying that the current economic situation is good. The World Bank has described Lebanon’s economic crisis as one of the most severe in the world since the mid-19th Century.

Overall most people don’t expect the economic situation in their country will improve in the next few years. However there is some optimism. In six countries, over a third of surveyed citizens say the situation will be better or somewhat better in the coming two to three years.

Despite the economic turmoil currently gripping Tunisia, its respondents are the most hopeful about the future, with 61% saying things will be much better or somewhat better in a few years.

The future is “uncertain”, says Dr Robbins of Arab Barometer. Citizens in the region may be looking to alternative political systems, such as the Chinese model – an authoritarian one-party system – that he says has “brought a huge number of people out of poverty in the last 40 years”.

“That type of rapid economic development is what many people are looking for,” he says.

Additional data journalism by Erwan Rivault.

Methodology

The survey was carried out by the research network, Arab Barometer. The project interviewed 22,765 people face-to-face in nine countries and the Palestinian territories. The Arab Barometer is a research network based at Princeton University. They have been conducting surveys like this since 2006. The 45-minute, largely tablet-based interviews were conducted by researchers with participants in private spaces.

It is of Arab world opinion, so does not include Iran, Israel or Turkey, though it does include the Palestinian territories. Most countries in the region are included but several Gulf governments refused full and fair access to the survey. The Kuwait and Algeria results came in too late to include in the BBC Arabic coverage. Syria could not be included due to the difficulty of access.

For legal and cultural reasons some countries asked to drop some questions. These exclusions are taken into account when expressing the results, with limitations clearly outlined.

You can find out more details about the methodology on the Arab Barometer website.

Adblock test (Why?)



Source link

Continue Reading

Economy

Boris Johnson Is in Trouble But the British Economy Will Do Better Than Most. – Bloomberg

Published

 on


[unable to retrieve full-text content]

Boris Johnson Is in Trouble But the British Economy Will Do Better Than Most.  Bloomberg



Source link

Continue Reading

Economy

BOE's Cunliffe Says Economy Is Slowing Due to Spending Squeeze – Bloomberg

Published

 on


[unable to retrieve full-text content]

BOE’s Cunliffe Says Economy Is Slowing Due to Spending Squeeze  Bloomberg



Source link

Continue Reading

Trending