A general view of the river Spree and the television tower in Berlin, Germany, April 18, 2020. CHRISTIAN MANG/Reuters
Germany may be able to manage the fiscal impact of the coronavirus crisis without exceeding approved debt levels if the economy recovers in the second half of the year, Finance Minister Olaf Scholz said in an interview published on Sunday.
Parliament suspended a debt brake to fight the crisis on March 25 with a supplementary budget of 156 billion euro, 100 billion euros for an economic stability fund that can take direct equity stakes in companies, and 100 billion euros in credit to public-sector development bank KfW.
The measures were predominantly aimed at funding healthcare and helping companies.
Asked if 156 billion could remain the top level of new debt, Scholz told the Welt am Sonntag newspaper: “If we manage to move the economic curve upwards again in the second half of the year, then this could be the case.”
He said that Germany would aim to recover the outlays over a long-term period without having to make substantial savings elsewhere.
He praised the country’s social welfare system of capitalism that makes a high level of state support possible, but added this meant there could be higher taxation of top earners after the crisis.
People enjoy the evening sun in the park next to the Schoeneberg town hall in Berlin on April 18, 2020
ODD ANDERSEN/AFP/Getty Images
A demand by his Social Democratic party in a coalition government led by Chancellor Angela Merkel’s conservatives, he said such taxation needed to be “fair and just,” supporting lower income groups as well.
The government package further includes a stability fund of 400 billion euros in loan guarantees to secure corporate debt at risk of defaulting, taking the overall sum to more than 750 billion euros.
Scholz said that he would aim to provide economic stimuli, if necessary, after the end of the current lockdown policy that keeps businesses shut and the population at home.
“When it is the right time, we will get measures on their way to stimulate business again,” he said. “Those will have to be as economists would imagine them – targeted, fit for purpose and limited in time.
“Also, we will keep our eyes fixed on the modernisation of our country, such as through the reduction of carbon dioxide emissions, the expansion of electric mobility, or digitisation.”
He said the government was also looking into support measures for hotel and restaurant owners.
OTTAWA – The parliamentary budget officer says the federal government likely failed to keep its deficit below its promised $40 billion cap in the last fiscal year.
However the PBO also projects in its latest economic and fiscal outlook today that weak economic growth this year will begin to rebound in 2025.
The budget watchdog estimates in its report that the federal government posted a $46.8 billion deficit for the 2023-24 fiscal year.
Finance Minister Chrystia Freeland pledged a year ago to keep the deficit capped at $40 billion and in her spring budget said the deficit for 2023-24 stayed in line with that promise.
The final tally of the last year’s deficit will be confirmed when the government publishes its annual public accounts report this fall.
The PBO says economic growth will remain tepid this year but will rebound in 2025 as the Bank of Canada’s interest rate cuts stimulate spending and business investment.
This report by The Canadian Press was first published Oct. 17, 2024.
OTTAWA – Statistics Canada says the level of food insecurity increased in 2022 as inflation hit peak levels.
In a report using data from the Canadian community health survey, the agency says 15.6 per cent of households experienced some level of food insecurity in 2022 after being relatively stable from 2017 to 2021.
The reading was up from 9.6 per cent in 2017 and 11.6 per cent in 2018.
Statistics Canada says the prevalence of household food insecurity was slightly lower and stable during the pandemic years as it fell to 8.5 per cent in the fall of 2020 and 9.1 per cent in 2021.
In addition to an increase in the prevalence of food insecurity in 2022, the agency says there was an increase in the severity as more households reported moderate or severe food insecurity.
It also noted an increase in the number of Canadians living in moderately or severely food insecure households was also seen in the Canadian income survey data collected in the first half of 2023.
This report by The Canadian Press was first published Oct 16, 2024.
OTTAWA – Statistics Canada says manufacturing sales in August fell to their lowest level since January 2022 as sales in the primary metal and petroleum and coal product subsectors fell.
The agency says manufacturing sales fell 1.3 per cent to $69.4 billion in August, after rising 1.1 per cent in July.
The drop came as sales in the primary metal subsector dropped 6.4 per cent to $5.3 billion in August, on lower prices and lower volumes.
Sales in the petroleum and coal product subsector fell 3.7 per cent to $7.8 billion in August on lower prices.
Meanwhile, sales of aerospace products and parts rose 7.3 per cent to $2.7 billion in August and wood product sales increased 3.8 per cent to $3.1 billion.
Overall manufacturing sales in constant dollars fell 0.8 per cent in August.
This report by The Canadian Press was first published Oct. 16, 2024.
