The OECD headquarters, in Paris, on Sept. 3, 2009.Charles Platiau/Reuters
The global economic outlook has improved from a few months ago as the inflation shock eases, but rising interest rates will keep risks high, the OECD said on Friday, hiking its growth forecasts for major economies.
After growth last year of 3.2 per cent, the world economy is on course to expand 2.6 per cent as central bank tightening takes full effect, the Organization for Economic Co-operation and Development said in its interim economic outlook.
The Paris-based organization raised its forecast for global growth from 2.2 per cent in its last Economic Outlook in November, citing a decline in energy and food prices and China’s easing of its anti-COVID restrictions.
Looking to next year, global growth was expected to accelerate to 2.9 per cent – compared with a November forecast of 2.7 per cent – as the hit to household incomes from high energy prices faded.
The OECD forecast that inflation in the Group of 20 major economies would fall from 8.1 per cent last year to 5.9 per cent this year and further decline to 4.5 per cent in 2024 – still well above targets despite interest rate hikes by many central banks.
It said the full impact of higher interest rates was hard to gauge, warning that increased stress for borrowers could translate into losses for some banks, citing the recent collapse of Silicon Valley Bank in the United States as an example.
Setting aside turmoil in financial markets following SVB’s failure and continued worries about Swiss lender Credit Suisse, the European Central Bank hiked interest rates by a further half percentage point on Thursday to fight inflation.
The OECD projected that central bank policy rates would peak at 5.25-5.5 per cent in the United States and 4.25 per cent in the euro area and Britain with a decline in inflation possibly allowing for a “mild” easing next year.
The OECD forecast that U.S. economic growth would slow from 1.5 per cent this year to 0.9 per cent next year as higher interest rates cooled demand. With the U.S. labour market holding up better than expected, the forecast for this year was up from 0.5 per cent in November and down from 1.0 per cent for 2024.
Boosted by the easing of anti-COVID measures, the Chinese economy was seen growing 5.3 per cent this year and 4.9 per cent in 2024, up from November forecasts for 4.6 per cent and 4.1 per cent respectively.
The outlook for the euro area had also improved thanks to a drop in energy prices with the 20-nation bloc expected to see growth this year of 0.8 per cent followed by 1.5 per cent in 2024. The OECD had previously forecast 0.5 per cent and 1.4 per cent growth respectively.
TORONTO – Strength in the base metal and technology sectors helped Canada’s main stock index gain almost 100 points on Friday, while U.S. stock markets also climbed higher.
The S&P/TSX composite index closed up 93.51 points at 23,568.65.
In New York, the Dow Jones industrial average was up 297.01 points at 41,393.78. The S&P 500 index was up 30.26 points at 5,626.02, while the Nasdaq composite was up 114.30 points at 17,683.98.
The Canadian dollar traded for 73.61 cents US compared with 73.58 cents US on Thursday.
The October crude oil contract was down 32 cents at US$68.65 per barrel and the October natural gas contract was down five cents at US$2.31 per mmBTU.
The December gold contract was up US$30.10 at US$2,610.70 an ounce and the December copper contract was up four cents US$4.24 a pound.
This report by The Canadian Press was first published Sept. 13, 2024.
OTTAWA – Statistics Canada says wholesale sales, excluding petroleum, petroleum products, and other hydrocarbons and excluding oilseed and grain, rose 0.4 per cent to $82.7 billion in July.
The increase came as sales in the miscellaneous subsector gained three per cent to reach $10.5 billion in July, helped by strength in the agriculture supplies industry group, which rose 9.2 per cent.
The food, beverage and tobacco subsector added 1.7 per cent to total $15 billion in July.
The personal and household goods subsector fell 2.5 per cent to $12.1 billion.
In volume terms, overall wholesale sales rose 0.5 per cent in July.
Statistics Canada started including oilseed and grain as well as the petroleum and petroleum products subsector as part of wholesale trade last year, but is excluding the data from monthly analysis until there is enough historical data.
This report by The Canadian Press was first published Sept. 13, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in the base metal and energy sectors, while U.S. stock markets were mixed.
The S&P/TSX composite index was up 172.18 points at 23,383.35.
In New York, the Dow Jones industrial average was down 34.99 points at 40,826.72. The S&P 500 index was up 10.56 points at 5,564.69, while the Nasdaq composite was up 74.84 points at 17,470.37.
The Canadian dollar traded for 73.55 cents US compared with 73.59 cents US on Wednesday.
The October crude oil contract was up $2.00 at US$69.31 per barrel and the October natural gas contract was up five cents at US$2.32 per mmBTU.
The December gold contract was up US$40.00 at US$2,582.40 an ounce and the December copper contract was up six cents at US$4.20 a pound.
This report by The Canadian Press was first published Sept. 12, 2024.
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