COVID-19 has put Canada in a “deep fiscal hole,” and the only way to get out of it is to spark the oil and gas sector, Premier Jason Kenney said Friday.
Noting the federal government’s announcement Wednesday it expected to post a $343-billion deficit, Kenney expressed optimism that demand for oil would bolster Alberta’s recovery.
“When the global economy comes back from COVID, when demand returns for oil and gas, we are going to see something of a supply shortage, because of the upstream exploration that has been cancelled,” he said at a Friday news conference.
“So we’ll see prices go up, and that will be a great opportunity for Alberta especially as we make progress on pipelines,” Kenney said.
At Friday’s market close, West Texas Intermediate crude was priced at just over US$40.
TC Energy’s Keystone XL pipeline, which the government of Alberta has committed $7 billion in financial support, faced a legal hurdle this week when the U.S. Supreme Court refused to let construction begin on the project.
Austrian economy might not shrink as much as previously forecast: ONB – TheChronicleHerald.ca
BERLIN (Reuters) – Austria’s economy could shrink by around 6% this year, the Austrian National Bank on Friday, striking a more optimistic tone than in early June, when it had forecast a 7.2% decline.
It said weekly real-time gross domestic product (GDP) data showed the Alpine republic’s economy was recovering faster than expected.
“As long as we avoid a strong second wave of COVID-19 infections, the collapse in Austria’s economy in 2020 could be less severe than had been expected in our forecast in early June,” the ONB said.
It warned that the risks related to the forecast for a 6% contraction remained clearly to the downside though.
(Reporting by Michelle Martin; editing by Thomas Seythal)
Japan's spending slump eases as economy reopens, COVID-19 clouds outlook – TheChronicleHerald.ca
By Leika Kihara
TOKYO (Reuters) – Japan’s household spending fell at a much slower pace in June than in the previous month as the economy re-opened from lockdown measures to contain the coronavirus pandemic, offering some hope of a moderate recovery later this year.
But the recovery was driven largely by the government’s blanket cash payouts to households, which were spent on big ticket items like television sets, personal computers and sofas.
That cast some doubt on the sustainability of the rebound, particuarly as rising COVID-19 infections nationwide have forced the government to request citizens hold off on unnecessary travel and work from home as much as possible.
“The rebound in consumption was stronger than expected, so we may see the economy pick up faster than initially thought,” said Yoshiki Shinke, chief economist at Dai-ichi Life Research Institute.
“But renewed rises in infection numbers are worrying. It’s too early to be optimistic on the outlook.”
Household spending in June declined 1.2% from a year earlier, government data showed on Friday, less than a median market forecast for a 7.5% drop.
It followed a record 16.2% drop in May, when consumers were still heeding authorities’ calls to stay home to contain the pandemic. Those emergency steps were lifted in late May.
Compared with the previous month, household spending jumped 13.0% in June to mark the biggest increase on record as the government’s cash payouts offset a steady drop in regular wages.
The payouts helped push spending on air conditioners up by nearly 30% in June, television sets by 83%, and tables and sofas by two-fold, the data showed.
But inflation-adjusted real wages fell for the fourth consecutive month in June, clouding the outlook for an economy bracing for a prolonged impact from the pandemic.
The fallout from the pandemic has pushed Japan deeper into recession, hitting an economy already reeling from the damage to consumption and exports from last year’s tax hike and slumping overseas demand.
(Reporting by Leika Kihara; additional reporting by Daniel Leussink; editing by Jane Wardell)
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