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Green services can help make the circular economy a reality – World Economic Forum

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World Economic Forum articles may be republished in accordance with the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International Public License, and in accordance with our Terms of Use.

The views expressed in this article are those of the author alone and not the World Economic Forum.

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Kevin Carmichael: Jobs numbers show Bank of Canada hasn’t wrecked the economy after all

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What if the Bank of Canada knows what it’s doing?

Inflation is hovering around seven per cent, and the central bank’s target is two per cent, so the easy answer is, “No, it doesn’t have a clue what it’s doing.”

The news this week that the Bank of Canada lost money for the first time in its 87-year history only adds to the superficial notion that appointing Tiff Macklem to guide monetary policy was a mistake, even if the losses were incurred fighting a crisis that was unlike anything any living policymaker had ever seen.

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“We didn’t get everything right,” Macklem told the House finance committee on Nov. 23. “We got a lot of things right. We have some lessons to learn.”

The inflation miss was a serious mistake that warrants deeper scrutiny in case there are things that can be learned that will keep it from happening again. Macklem told lawmakers that as soon as inflation is back to target, “we are going to have to have a thorough review of how all our tools worked” through the COVID crisis.

When the Bank of Canada gets around to that review, it will turn up positives that are obvious to anyone who bothers to look, but end up obscured by the panic over inflation. The latest evidence that the Bank of Canada hasn’t wrecked the economy arrived Dec. 2, when Statistics Canada reported that hiring was little changed in November, and the jobless rate dropped to 5.1 per cent, a possible sign that higher interest rates might be taking the steam out of the economy without severely hurting momentum.

Job seekers attend a job fair in Calgary last month.
Job seekers attend a job fair in Calgary last month. Photo by Jim Wells/Postmedia

The dollar fell against the U.S. currency after the numbers were released, so some traders saw the news as a negative that would cause the Bank of Canada to balk at additional interest-rate increases. It’s possible. Macklem was clear at the finance committee that he isn’t finished, but Bay Street and Wall Street are split on whether that means more outsized interest-rate increases, or whether the Bank of Canada might be ready to taper its aggression, given its own forecasts show the economy could easily slide into a recession at any point over the next few months.

Statistics Canada said employers added 10,000 positions last month, less than the survey’s margin of error, making it difficult to say more than the labour market stood still. However, the agency’s monthly survey of households turned up 108,000 positions in October, an unusually large number, so hiring flatlined at a high level in November.

The jobless rate remains well inside any conventional definition of full employment, which is how economists describe an economy in which there are quantitatively enough jobs for everyone who wants one. Full-time employment increased by about 51,000 positions in November, and have increased by some 460,000 positions since November 2021, another sign of a strong labour market.

“It’s quite clear that the labour market remains tight and in solid shape overall,” Douglas Porter, chief economist at Bank of Montreal, said in a note to his clients.

Average hourly wages increased 5.6 per cent from November 2021, the sixth consecutive month that pay gains topped five per cent, a sign of upward inflationary pressure that the Bank of Canada has said it will be watching closely. Porter said the “still firm” pace of pay increases could leave Macklem uneasy about inflation heading into next week’s interest-rate decision, and re-upped his prediction that policymakers will opt to raise the benchmark rate another half point, which would put the target at 4.25 per cent.

The Bank of Canada’s benchmark rate was 0.25 per cent in March, and the possibility of an increase of four percentage points in less than a year will startle those who worried that a decade of ultra-low interest rates would make households and executives supersensitive to higher borrowing costs.

That worry could still be valid. Indeed, after getting beaten up earlier in the year for letting inflation get out of control, the Bank of Canada now regularly faces invective for causing a recession that hasn’t yet happened.

Earlier this week, Statistics Canada reported that gross domestic product grew at an annual rate of 2.9 per cent in the third quarter, much faster than most forecasts. The GDP numbers, paired with the ongoing strength of the labour market, supports Macklem’s bet that it is better to attack inflation now, when the economy is strong, rather than proceed tentatively, discover inflation is persistent, and end up having to raise interest rates when the economy is weaker. It might even be time to resume talking about a “soft landing,” which is how Bay Street talks about the possibility that an inflationary economy can be slowed without crashing into a bad recession.

“We’re entering 2023 at least in better shape than we have seen in many other moments in the past where we’re entering a slowdown or a recession,” Guy Cormier, chief executive of Desjardins Group, told the Financial Post’s Barbara Shecter this week, observing that there is “still money” in the personal and business accounts of the financial institution’s clients. “Yes, there will be a slowdown, but we feel that there are some positive conditions that could unfold in the next six, seven months.”

Here’s another positive: Statistics Canada reported that the employment rate of women aged 25 to 54 rose to 81.6 per cent in November, a record that further narrowed the gap with men. One of the goals of the Bank of Canada’s assault on the COVID crisis was to keep traditionally marginalized groups from getting left behind, betting that would create the foundation for a sturdier recovery.

Macklem’s not wrong when he ways the central bank got a lot of things right.

• Email: kcarmichael@postmedia.com | Twitter: carmichaelkevin

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IFF 2022 Global Finance and Development Report: Global Economy Expected to Grow 2.8% in 2023 Excluding Impact of Pandemic

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With the same exclusion, China’s economy is on track to expand 4.6%

GUANGZHOU, China, Dec. 4, 2022 /CNW/ — Global economy is to grow 2.8% in 2023 as the Chinese economy is expected to expand 4.6%, next year according to forecasts made by the International Finance Forum (IFF) 2022 Global Finance and Development Report released at the IFF 2022 Annual Meeting on Friday.

The report estimates Chinese economy will grow 3.3% in 2022.

Developed economies will grow 1.2% while developing countries will expand 3.9% next year, the report said.

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Global inflation, the ongoing pandemic, and geopolitical tensions are the main reasons for global slowdown in 2022, said Prof. Song Min, IFF Academic Committee Member and Dean of the Economics and Management School at Wuhan University, leading author of the report.

The Chinese economy will rebound in late 2022 and early 2023 as the country adjusts its Covid control measures according to the report.

The report forecasts the global economy to remain weak in 2023 as monetary tightening in developed countries to rein in inflation will slow growth, which could further slow down economic growth in developing nations.

To boost growth, the IFF recommends a few policy measures including China’s adjusting its pandemic controls, moderate monetary policies by central banks, boosting domestic growth by developing nations and quickening of green transition and strengthening of international cooperation.

This is the second annual report by the IFF on the global economy. The report has two sections: the first part provides an analysis and outlook of the global economy while the second part offers an assessment of the global digital economy and insights into new growth momentum of global financial markets.

About International Finance Forum (IFF)

The International Finance Forum (IFF) is a non-profit, non-official independent international organization founded in October 2003 by leaders from China, the US, the EU and the other G20 countries, in concert with emerging economies and the leaders of multiple international organizations, including the UN, the World Bank and the IMF. Also known as the Finance 20 (F20), the IFF is also a high-level permanent dialogue mechanism and multilateral cooperation organization within the world of finance.

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View original content:https://www.prnewswire.com/news-releases/iff-2022-global-finance-and-development-report-global-economy-expected-to-grow-2-8-in-2023-excluding-impact-of-pandemic-301694111.html

SOURCE International Finance Forum (IFF)

View original content: http://www.newswire.ca/en/releases/archive/December2022/04/c0217.html

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OPEC+ keeps steady policy amid weakening economy, Russian oil cap – The Globe and Mail

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The logo of the Organization of the Petroleoum Exporting Countries (OPEC) is seen outside of OPEC’s headquarters in Vienna, Austria, on March 3.Lisa Leutner /The Associated Press

OPEC+ agreed to stick to its oil output targets at a meeting on Sunday as the oil markets struggle to assess the impact of a slowing Chinese economy on demand and a G7 price cap on Russian oil on supply.

The decision comes two days after the Group of Seven (G7) nations agreed a price cap on Russian oil.

OPEC+, which comprises the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, angered the United States and other Western nations in October when it agreed to cut output by 2 million barrels per day (bpd), about 2% of world demand, from November until the end of 2023.

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Washington accused the group and one of its leaders, Saudi Arabia, of siding with Russia despite Moscow’s war in Ukraine.

OPEC+ argued it had cut output because of a weaker economic outlook. Oil prices have declined since October due to slower Chinese and global growth and higher interest rates, prompting market speculation the group could cut output again.

But on Sunday the group of oil producers decided to keep the policy unchanged. Its key ministers will next meet on Feb. 1 for a monitoring committee while a full meeting is scheduled for June 3-4.

On Friday, G7 nations and Australia agreed a $60 per barrel price cap on Russian seaborne crude oil in a move to deprive President Vladimir Putin of revenue while keeping Russian oil flowing to global markets.

Moscow said it would not sell its oil under the cap and was analyzing how to respond.

Many analysts and OPEC ministers have said the price cap is confusing and probably inefficient as Moscow has been selling most of its oil to countries like China and India, which have refused to condemn the war in Ukraine.

Neither an OPEC meeting on Saturday nor the OPEC+ meeting on Sunday discussed the Russian price cap, sources said.

Russia’s Deputy Prime Minister Alexander Novak said on Sunday Russia would rather cut production than supply oil under the price cap and said the cap may affect other producers.

Sources have told Reuters several OPEC+ members have expressed frustration at the cap saying the anti-market measure could ultimately be used by the West against any producer.

The United States said the measure was not aimed at OPEC.

JP Morgan said on Friday that OPEC+ could review production in the new year based on fresh data on Chinese demand trends and consumer compliance with price caps on Russia crude output and tanker flow.

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