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Malaysia's economy suffers smaller contraction, central bank provides rosier 2021 outlook – TheChronicleHerald.ca

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By Joseph Sipalan and Rozanna Latiff

KUALA LUMPUR (Reuters) – Malaysia’s central bank provided a rosier growth outlook for 2021 after the economy suffered a smaller contraction in the third quarter, but said it would continue to help households and businesses withstand the fallout of the COVID-19 pandemic.

Gross domestic product fell 2.7% in July-September, smaller than the 3.2% decline forecast in a Reuters poll and showing a marked improvement on the 17.1% slump in the second quarter.

The trade-reliant economy recovered from its first contraction since the 2009 financial crisis after the government began gradually easing curbs to contain the virus in May.

The central bank said 125 basis points worth of rate cuts this year would support 2021 growth, but that it would continue to make “policy support and assistance” available.

“Going into 2021, growth is expected to recover, benefiting from the improvement in global demand and a turnaround in public and private sector expenditure amid various policy support,” said Bank Negara Malaysia (BNM) Governor Nor Shamsiah Mohd Yunus at a virtual news conference.

“Future monetary policy considerations will continue to be guided by evolving conditions.”

Private consumption eased 2.6% in the third quarter from a year earlier after a 5.6% decline in the previous three months, the central bank said, while manufacturing grew 3.3% after a 18.3% drop in the second quarter. Gross exports jumped 4.4% in the July-September period after a 15.1% fall.

The BNM also revised its 2021 projections, raising the midpoint growth forecast to 7% from an earlier average of 6.75%.

Barclays said it expected the central bank to leave rates unchanged throughout 2021, with a low risk of a 25 basis point cut.

While some economists worried that the reimposition of coronavirus restrictions in October would dampen the recovery in Malaysia in the last three months of the year, the central bank said the risks to global growth from COVID-19 had eased.

“The risk to growth from these resurgences is not expected to be as severe as the magnitude of contractions observed in the second quarter,” Nor Shamsiah added.

Analysts at Capital Economics said Malaysia’s outlook was dependent on how well the government managed to contain the spread of the coronavirus. Total infections tripled to over 43,000 cases since a fresh outbreak in September.

“If Malaysia is able contain the second wave, as others in the region have been successful in doing, the economic impact should be relatively small,” Alex Holmes, Asia economist at Capital Economics said.

($1 = 4.1320 ringgit)

(Editing by Ana Nicolaci da Costa)

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Minimum wage to hire higher-paid temporary foreign workers set to increase

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OTTAWA – The federal government is expected to boost the minimum hourly wage that must be paid to temporary foreign workers in the high-wage stream as a way to encourage employers to hire more Canadian staff.

Under the current program’s high-wage labour market impact assessment (LMIA) stream, an employer must pay at least the median income in their province to qualify for a permit. A government official, who The Canadian Press is not naming because they are not authorized to speak publicly about the change, said Employment Minister Randy Boissonnault will announce Tuesday that the threshold will increase to 20 per cent above the provincial median hourly wage.

The change is scheduled to come into force on Nov. 8.

As with previous changes to the Temporary Foreign Worker program, the government’s goal is to encourage employers to hire more Canadian workers. The Liberal government has faced criticism for increasing the number of temporary residents allowed into Canada, which many have linked to housing shortages and a higher cost of living.

The program has also come under fire for allegations of mistreatment of workers.

A LMIA is required for an employer to hire a temporary foreign worker, and is used to demonstrate there aren’t enough Canadian workers to fill the positions they are filling.

In Ontario, the median hourly wage is $28.39 for the high-wage bracket, so once the change takes effect an employer will need to pay at least $34.07 per hour.

The government official estimates this change will affect up to 34,000 workers under the LMIA high-wage stream. Existing work permits will not be affected, but the official said the planned change will affect their renewals.

According to public data from Immigration, Refugees and Citizenship Canada, 183,820 temporary foreign worker permits became effective in 2023. That was up from 98,025 in 2019 — an 88 per cent increase.

The upcoming change is the latest in a series of moves to tighten eligibility rules in order to limit temporary residents, including international students and foreign workers. Those changes include imposing caps on the percentage of low-wage foreign workers in some sectors and ending permits in metropolitan areas with high unemployment rates.

Temporary foreign workers in the agriculture sector are not affected by past rule changes.

This report by The Canadian Press was first published Oct. 21, 2024.

— With files from Nojoud Al Mallees

The Canadian Press. All rights reserved.

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

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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.

The Canadian Press. All rights reserved.

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Statistics Canada says levels of food insecurity rose in 2022

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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.

The Canadian Press. All rights reserved.

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