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OECD lifts economic outlook on stronger-than-expected U.S., Chinese recoveries – The Globe and Mail

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A man rides past containers at an industrial port in Tokyo on May 22, 2019.

Kim Kyung Hoon/Reuters

The global economy appears to be recovering from the coronavirus slump faster than thought only a few months ago thanks to improving outlooks for China and the United States, the OECD said on Wednesday.

The world economy is on course to contract 4.5 per cent this year, the Organisation for Economic Cooperation and Development said, which – though unprecedented in recent history – was up from the 6 per cent contraction that it forecast in June.

Provided the virus is kept from spreading out of control, the global economy will bounce back into growth next year by expanding 5 per cent, trimmed from a June forecast of 5.2 per cent, the Paris-based policy forum said.

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However, a stronger resurgence of the virus or more strict measures to contain it could chop 2-3 percentage points from the 2021 outlook, the OECD warned.

The OECD said its forecasts were built on the assumption that local outbreaks would continue and would be targeted with local action rather than nationwide lockdowns. It also assumed a vaccine would not be widely available until late next year.

The OECD said governments and central banks’ actions to support households and companies’ incomes had helped avert worse downturns and should therefore be kept up as outbreaks keep appearing sporadically.

Its brighter overall outlook for this year masked big differences between major economies with the United States, China and Europe seen performing better than feared while India, Mexico and South Africa may do worse as they struggle to contain the virus.

Having been the first country to experience the outbreak and having moved swiftly to control its spread, China was forecast to be the only country in the G20 group of economic powers to see growth this year with an increase of 1.8 per cent, up from a June projection of a contraction of 2.6 per cent.

Meanwhile, the U.S. economy, the world’s biggest, was also forecast to fare better this year than previously feared with a contraction of 3.8 per cent, still dire but far better than the -7.3 per cent forecast previously.

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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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