Economy

IMF flags Israel’s judicial reforms as downside economic risk

Published

1 year ago

May 11, 2023

The International Monetary Fund on Wednesday flagged Israel’s proposed judiciary reforms as a significant downside risk to the economy that could tighten financial conditions and hinder investment, consumption and long-term growth.

Israel needed to permanently reduce uncertainty around the reforms with a “politically sustainable solution that is clearly communicated and well understood both domestically and abroad,” the IMF said in a statement issued at the end of an “Article IV” staff mission to Jerusalem.

Prime Minister Benjamin Netanyahu’s hard-right coalition government has proposed sweeping changes that would limit the Supreme Court’s power to rule against the legislature and the executive branch, while giving ministers more power in appointing judges.

The plan has sparked domestic protests and caused alarm among Israel’s Western allies over its potential to weaken the rule of law.

Netanyahu says the reforms are seeking a better balance between the different branches of government, but has agreed to delay the overhaul to try to negotiate a middle ground.

“Absent the emergence of a durable and politically sustainable solution, continued uncertainty could significantly increase the price of risk in the economy, tightening financial conditions and hindering investment and consumption, with potential repercussions for growth, also in the longer term,” the IMF said.

It added: “as in any country, maintaining strength of the rule of law would be important for economic success.”

The comments come after Moody’s Investors Service last month lowered its Israel’s A1 sovereign credit rating outlook to stable from positive, citing the reforms.

The IMF review gave Israel strong marks for its economic policies and management, saying that its GDP growth would slow to 2.5% in 2023 from “remarkable” 6.5% growth in 2022. It added that public debt-to-GDP levels had returned to pre-COVID levels, its international reserves were ample, and its banking sector had adequate capital and liquidity buffers.

The IMF added that Israel’s monetary policy stance should remain tight given a tight labor market and headline inflation above the central bank’s target range. (Reporting by David Lawder and Steven Scheer; Editing by Alex Richardson)

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Economy

PBO projects deficit exceeded Liberals’ $40B pledge, economy to rebound in 2025

Published

3 days ago

October 17, 2024

Anne Joseph

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.

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Economy

Statistics Canada says levels of food insecurity rose in 2022

Published

4 days ago

October 16, 2024

Anne Joseph

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.

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Economy

Statistics Canada says manufacturing sales fell 1.3% to $69.4B in August

Published

4 days ago

October 16, 2024

Anne Joseph

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.

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