The IMF is warning that threats to the global eocnomic recovery are growing along with a ‘dangerous divergence’ in recoveries between richer and poorter nations.
The International Monetary Fund did not mince words in its latest outlook for the global economy released on Tuesday, warning that the threats to the economic recovery from last year’s COVID-19 disruptions are growing, along with a “dangerous divergence” between richer and poorer countries.
The IMF revised its headline forecast for global growth this year down slightly by 0.1 percent to 5.9 percent while leaving its projections for 2022 unchanged at 4.9 percent.
“This modest headline revision, however, masks large downgrades for some countries,” said the fund, noting that “the outlook for the low-income developing country group has darkened considerably due to worsening pandemic dynamics.”
IMF chief economist Gita Gopinath elaborated on those pandemic dynamics in a virtual news conference on Tuesday, saying that global supply shortages in the face of resurgent demand are triggering commodity price inflation that is being passed on to consumers.
“Food prices have increased the most in low-income countries where food insecurity is most acute, adding to the burdens of poorer households, and raising the risk of social unrest,” she noted.
Moreover, emerging and developing economies are facing tougher financing conditions as debt levels climb, inflation soars and their currencies weaken against the US dollar – compelling them to raise interest rates in a bid to keep inflation expectations in check.
Gopinath added that challenges like rising food inflation, food insecurity and increased risk-taking in financial markets are underpinned by the pandemic’s “continued grip” on global society.
“The foremost priority is, therefore, to vaccinate at least 40 percent of the population in every country by the end of this year, and 70 percent by the middle of next year,” Gopinath said.
Almost 60 percent of the population in advanced economies are fully vaccinated and some people are even receiving booster shots. At the same time, roughly 96 percent of the population in low-income countries have yet to receive a single COVID jab, the IMF noted.
The recovery gap between richer and poorer countries is expected to widen, with the IMF calling for advanced economies to regain their pre-pandemic trend path next year and exceed it by 0.9 percent in 2024.
By contrast, the fund predicted economic growth in emerging and developing economies – minus China – would remain 5.5 percent below pre-pandemic forecasts in 2024, “resulting in a larger setback to improvements in their living standards”.
While the IMF saw inflation reverting to pre-pandemic levels by the middle of next year, a more granular analysis reveals a wide disparity in the outlook between nations.
For advanced economies, the fund believed headline inflation would peak in the final months of this year and decline to about 2 percent by mid-2022. For emerging market and developing economies, headline inflation is expected to peak at 6.8 percent later this year before falling to about 4 percent by the middle of next year “with risks tilted to the upside over the medium term”.
Canada competition watchdog may have to rely more on litigation – top official
Competition Bureau Canada watchdog may have to rely more on litigation after its proposed veto of a takeover was overturned, and this could make life harder for companies seeking to merge, the agency head said on Wednesday.
Matthew Boswell, commissioner of competition, noted his bureau had tried this year to block western Canadian oil and gas waste firm Secure Energy Services Inc from buying rival Tervita Corp.
Secure then turned to the independent Competition Tribunal, which denied the bureau’s injunction and underscored “the high bar that needs to be met to prevent mergers … that we allege are anti-competitive,” he said.
The tribunal, he said, had acted so quickly that the bureau had not had time to present all its evidence, raising valid questions about the state of competition laws in Canada.
“This decision has significant implications for how we conduct future merger reviews, particularly in cases where there are competition concerns,” Boswell said in a speech to the Canadian Bar Association.
“This may mean that we must pursue a litigation-focused approach that is costly and less predictable for merging parties,” he added.
Secure relied on the so-called efficiencies defense, which is unique to Canada. Boswell said this procedure allowed the tribunal to allow an anti-competitive merger to proceed if the transaction was deemed to produce efficiency gains that were greater than its anti-competitive effects.
“The efficiencies defense raises significant practical
challenges for the Bureau to estimate and measure anti-competitive harm,” he said. “(We should) ask ourselves whether our competition laws are really working in the best interest of all Canadians.”
The bureau is an independent law enforcement agency set up to ensure fair competition. It investigates price fixing, bid-rigging and mergers, among other matters.
(Reporting by David Ljunggren; Editing by Cynthia Osterman)
Canadian home price growth slows to near standstill in September
Canadian home prices barely rose in September from August as a recent slowdown in housing sales weighed, data showed on Wednesday.
The Teranet-National Bank Composite House Price Index, which tracks repeat sales of single-family homes in 11 major Canadian markets, rose 0.1% in September from August, marking the fourth consecutive month in which the monthly price increase was lower than the previous month.
“The slowdown in price growth can be linked to the slowdown in housing sales reported in recent months by the Canadian Real Estate Association,” Daren King, an economist at National Bank of Canada, said in a statement.
Eight of the 11 major markets rose, led by a 1% gain for Winnipeg, while prices were stable in Montreal and fell in Vancouver as well as in Ottawa-Gatineau. It was the first time in seven months that gains were not seen in all 11 regions.
On an annual basis, the index was up 17.3%, decelerating after it notched record annual growth in August. It was paced by a 31.7% gain in Halifax and a 28.0% gain in Hamilton.
(Reporting by Fergal Smith; Editing by Steve Orlofsky)
Oil rallies as U.S. crude stocks decline in tight market
Oil prices rallied on Wednesday after U.S. Crude Inventories at the nation’s largest storage site hit their lowest level in three years and nationwide fuel stocks fell sharply, a signal of rising demand.
Brent crude futures settled at $85.82 a barrel, a gain of 0.9% or 74 cents and the highest since October 2018.
November U.S. West Texas Intermediate (WTI) crude, which expires on Wednesday, settled at $83.87, up 91 cents, or 1.1%. The more active WTI contract for December settled up 98 cents to $83.42 a barrel.
Crude prices have risen as supply has tightened, with the Organization of the Petroleum Exporting Countries maintaining a slow increase in supply rather than intervening to add more barrels to the market, and as U.S. demand has ramped up.
Globally, refiners have been boosting output thanks to high margins, one that can only be restrained by maintenance. U.S. refining capacity use dropped in the most recent week, but analysts noted that supply may continue to tighten if U.S. refiners also pick up processing again.
“Stronger demand and concerns about a drop in inventories when refiners were already running a low rate during maintenance season is making people concerned about what will happen when refiners have to ramp up production to meet what is very strong demand for gasoline and distillate,” said Phil Flynn, senior energy analyst at Price Futures Group in Chicago.
U.S. crude stocks fell by 431,000 barrels in the most recent week, the U.S. Energy Information Administration said, against expectations for an increase, and gasoline stocks plunged by more than 5 million barrels as refiners cut processing due to maintenance. [EIA/S]
U.S. stocks at the Cushing, Oklahoma delivery hub hit their lowest level since October 2018. Gasoline stocks are now at their lowest since November 2019, the EIA said, while distillate stocks fell to levels not seen since early 2020.
Oil prices have also been swept up in surging natural gas and coal prices worldwide in anticipation that power generators may switch to oil to provide electricity.
Saudi Arabia’s minister of energy said users switching from gas to oil could account for demand of 500,000-600,000 barrels per day, depending on winter weather and prices of other sources of energy.
(Additional reporting by Sonali Paul in Melbourne and Koustav Samanta in Singapore; Editing by Andrea Ricci, Kirsten Donovan and David Gregorio)
SHA says COVID-19 protocols prevented a flu season last year – moosejawtoday.com
Province says flu shots prevents serious illness, deaths – My Comox Valley Now
Biden says he’s concerned about Chinese hypersonic missiles
Silver investment demand jumped 12% in 2019
Europe kicks off vaccination programs | All media content | DW | 27.12.2020 – Deutsche Welle
Iran anticipates renewed protests amid social media shutdown
News21 hours ago
N.Korea confirms submarine launch of new ballistic missile
Tech21 hours ago
Apple's voice-only Music subscription could boost Siri's accent understanding – TechCrunch
Health21 hours ago
U.S. surgeons successfully test pig kidney transplant in human patient
News20 hours ago
Coronavirus: What's happening in Canada and around the world Tuesday – CBC.ca
Economy22 hours ago
Economy Has Plenty of Offramps Before Stagflation City – Bloomberg
Investment21 hours ago
In highly uneven recovery, global investment flows rebound – UN News
Media21 hours ago
Elections Alberta launches formal review of social media policies after election day Twitter spat – Edmonton Journal
Business21 hours ago
Diapers to yogurt, global firms face higher costs amid supply-chain woes