Turkish Economy Shrinks Less Than Forecast After Crisis Stimulus - Yahoo Canada Finance | Canada News Media
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Turkish Economy Shrinks Less Than Forecast After Crisis Stimulus – Yahoo Canada Finance

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(Bloomberg) — Turkey’s economy contracted the most in over a decade but fared better than forecast by analysts as the government contained the damage from the coronavirus pandemic with a campaign of stimulus.

Gross domestic product last quarter shrank 9.9% from a year earlier, after a gain of 4.5% in the previous three months, according to data released on Monday. The median of 17 forecasts in a Bloomberg survey was for a contraction of 10.7%.

The severity of the shock was more evident in seasonally and working day-adjusted figures, which showed a decline of 11% in the second quarter from the previous three months, making it the steepest contraction in data going back to 1998.

Still, the $743 billion economy performed better than many of its peers among developing nations, thanks in part to a combination of interest-rate cuts, fiscal spending and a government-sponsored credit push.

Restrictions imposed by Turkey to stop the contagion from March were more stringent than in the rest of central and eastern Europe, the Middle East and North Africa, which translated into a “pronounced downturn” in the second quarter, according to a Goldman Sachs Group Inc.

To help businesses and consumers ride out the the pandemic, the Turkish government unveiled a 240 billion-lira ($32.7 billion) stimulus package while state banks ramped up lending. Meantime, the central bank injected liquidity by scooping up government bonds and delivered a series of rate cuts including an emergency decrease of a full percentage point in March.

An economic turnaround started to take hold as lockdown measures began to ease toward the end of the second quarter. Industrial production grew in June for the first time since February and economic confidence improved for four straight months through August.

But the drawbacks of the government’s efforts to juice up the economy have also become more obvious.

Inflationary pressures have reemerged alongside another wave of lira depreciation, prompting the central bank to increase the cost of funding through stealth tightening but without resorting to an outright rate hike. Turkey’s currency has depreciated about 19% against the dollar this year and is the worst performer in emerging markets in the third quarter.

The stimulus campaign may not save the economy from one of the steepest full-year contractions in history, with the International Monetary Fund predicting it could slump 5%. Treasury and Finance Minister Berat Albayrak is more optimistic, estimating this year’s performance at between minus 2% to a 1% gain.

“Leading indicators confirm that the economy is in the phase of recovery from its bottom point,” said Enver Erkan, an economist at Tera Securities in Istanbul.

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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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