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US economy set to boom in the next two years – leading macroeconomic influencers – Pharmaceutical Technology

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Federal Reserve policymakers remain optimistic about the US economy outlook, as an increasing number of citizens get vaccinated and government aid reaches households and businesses.

Pedro Nicolica da Costa

Pedro Nicolica da Costa, a Federal Reserve and economy correspondent at Market News International, retweeted an article on Federal policymakers remaining optimistic about the performance of the US economy.

According to Richmond Fed President, Thomas Barkin, the pandemic economy will pause just before taking off, as excess savings and fiscal stimulus funds will now be utilised by consumers and businesses alike, and with growing vaccinations and warmer weather. The Fed president believes that the economy’s growth and spending will remain strong through 2022 and 2023.

Atlanta Federal Reserve Bank President, Raphael Bostic, also stated that a burst of business activity during the summer could add a million jobs during the month. Economists have further predicted an addition of 650,000 jobs by the end of March 2021.

Rupa Subramanya

Rupa Subramanya, an economist, retweeted an article on how exports and the US stimulus will help bolster Vietnam’s economy. According to experts, while economies most exposed to the global merchandise trade would be most disadvantaged during the Covid-induced global recession, Vietnam is growing again because of a strong rise in exports. The country has also emerged as a clear winner in the US-China spat, making it a docking station for multistage trans-shipments to avoid American tariffs.

According to reports, the Southeast Asian nation’s first quarter GDP was up 4.5% compared to last year. It is being estimated that the recovery is driven by a surge in the sale of goods and services abroad, which rose to almost 20% year-over-year in March. It has been observed that sales to the US have dramatically risen and show no signs of slowing down. For instance, data reveals that US imports from Vietnam were about 29% of the Asian country’s total exports, far higher than the 20% average before 2019.

Economists state that although some of these gains may not be repeated, it is likely that the US share of Vietnam’s exports will remain high for some time. According to the Organisation for Economic Cooperation and Development (OECD), the domestic economic growth of 6-5% will keep US import demand strong for Vietnamese companies.

Diane Coyle

Professor Diane Coyle, an economist, retweeted an article on how self-employed workers in the UK have been the worst hit by the Covid-19 crisis. According to survey data, the latest lockdown imposed in January, has left self-employed workers with lower incomes and significantly reduced working hours.

Recent survey demonstrates that 14% of the self-employed quit their jobs in January 2021, up from September and May 2020. Another survey by the Centre for Economic Performance (CEP) survey found 37% of the self-employed working ten hours or less per week in January 2021, up 14 percentage points from August 2020.

In addition, 46% of the self-employed workers have had trouble paying for their basic expenses in January 2021. This is a rise from 29% in the summer but down from 33% during the first lockdown.

However, the government’s self-employment income support scheme (SEISS) has helped in holding up living standards of people as their earnings have consistently declined since the Covid outbreak.

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Canada to go big on budget spending as pandemic lingers, election looms

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By Julie Gordon

OTTAWA (Reuters) – Canada‘s Liberal government will deliver on its promise to spend big when it presents its first budget in two years next week amid a fast-rising third wave of COVID-19 infections and ahead of an election expected in coming months.

Finance Minister Chrystia Freeland has pledged to do “whatever it takes” to support Canadians, and in November promised up to C$100 billion ($79.8 billion) in stimulus over three years to “jump-start” an economic recovery in what is likely to be a crucial year for her party.

Prime Minister Justin Trudeau’s Liberals depend on the support of at least one opposition group to pass laws, and senior party members have said an election is likely within months as it seeks a clear majority and a free hand to legislate.

Furthermore, by September, all Canadians who want to be vaccinated will be, Trudeau has said.

Freeland has said the pandemic created a “window” of opportunity for a national childcare plan, and that will be reflected in next Monday’s budget along with spending to accelerate Canada‘s shift toward a more sustainable economy.

“It will be a green and innovative recovery plan aimed at creating jobs,” said a government source who declined to comment on specific measures. The budget will aim to help those “who have suffered most” the effects of the pandemic, the source said.

Critics say the government would be better to hold off on blockbuster spending because the economy has shown it is poised to bounce back, and to prevent the country from racking up too much debt.

“Clearly a garden-variety stimulus package is the last thing we need. This is pile-on debt,” said Don Drummond, an economist at Ontario’s Queen’s University.

“The risk is that at some point interest rates are going to go up and we’re going to be in trouble,” he said, pointing to the mid-1990s when Canada‘s debt-to-GDP ratio skyrocketed, leading to rating agency downgrades and years of austerity.

The Bank of Canada cut its benchmark interest rate to 0.25% to counter the economic fallout of the COVID-19 crisis and has said rates will not rise until labor market slack is absorbed, currently forecast for into 2023. That may change when it releases new projections on April 21.

EXPANDING ECONOMY

More than 3 million Canadians lost their jobs to the pandemic. As of March, before a third wave forced new lockdowns, only 296,000 remained unemployed because of COVID.

Despite still-high unemployment levels in hard-hit service sectors, the economy has expanded for nine straight months even as provinces have adjusted health restrictions to counter waves of infections.

“Once we see sustained reopening, we do think that the recovery will have quite a bit of momentum on its own,” said Josh Nye, a senior economist at RBC Economics.

“We think Canada‘s economy will be operating pretty close to full capacity by this time next year,” he said.

Economists surveyed by Reuters expect Freeland to project a deficit in the range of C$133 billion to C$175 billion for fiscal 2021/22, up from the C$121.2 billion ($96.7 billion)

deficit forecast in November. https://tmsnrt.rs/3wSJPcm

The deficit for fiscal 2020/21 ended in March is forecast by the government to top a historic C$381.6 billion ($304.5 billion).

Canada announced on Monday a C$5.9 billion ($4.7 billion) aid package for the country’s largest airline carrier, Air Canada, and said talks were ongoing with No. 2 carrier WestJet Airlines Ltd and others.

 

(Reporting by Julie Gordon in Ottawa; Additional reporting by Fergal Smith in Toronto; Editing by Steve Scherer and Peter Cooney)

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Economy

CANADA STOCKS – TSX ends flat at 19,228.03

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* The Toronto Stock Exchange’s TSX falls 0.00 percent to 19,228.03

* Leading the index were Corus Entertainment Inc <CJRb.TO​>, up 7.0%, Methanex Corp​, up 6.4%, and Canaccord Genuity Group Inc​, higher by 5.5%.

* Lagging shares were Denison Mines Corp​​, down 7.0%, Trillium Therapeutics Inc​, down 7.0%, and Nexgen Energy Ltd​, lower by 5.7%.

* On the TSX 93 issues rose and 128 fell as a 0.7-to-1 ratio favored decliners. There were 26 new highs and no new lows, with total volume of 183.7 million shares.

* The most heavily traded shares by volume were Toronto-dominion Bank, Nutrien Ltd and Organigram Holdings Inc.

* The TSX’s energy group fell 1.61 points, or 1.4%, while the financials sector climbed 0.67 points, or 0.2%.

* West Texas Intermediate crude futures fell 0.44%, or $0.26, to $59.34 a barrel. Brent crude  fell 0.24%, or $0.15, to $63.05 [O/R]

* The TSX is up 10.3% for the year.

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Canadian dollar outshines G10 peers, boosted by jobs surge

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Canadian dollar

By Fergal Smith

TORONTO (Reuters) – The Canadian dollar advanced against its broadly stronger U.S. counterpart on Friday as data showing the economy added far more jobs than expected in March offset lower oil prices, with the loonie also gaining for the week.

Canada added 303,100 jobs in March, triple analyst expectations, driven by the recovery across sectors hit by shutdowns in December and January to curb the new coronavirus.

“The Canadian economy keeps beating expectations,” said Michael Goshko, corporate risk manager at Western Union Business Solutions. “It seems like the economy is adapting to these closures and restrictions.”

Stronger-than-expected economic growth could pull forward the timing of the first interest rate hike by the Bank of Canada, Goshko said.

The central bank has signaled that its benchmark rate will stay at a record low of 0.25% until 2023. It is due to update its economic forecasts on April 21, when some analysts expect it to cut bond purchases.

The Canadian dollar was trading 0.3% higher at 1.2530 to the greenback, or 79.81 U.S. cents, the biggest gain among G10 currencies. For the week, it was also up 0.3%.

Still, speculators have cut their bullish bets on the Canadian dollar to the lowest since December, data from the U.S. Commodity Futures Trading Commission showed. As of April 6, net long positions had fallen to 2,690 contracts from 6,518 in the prior week.

The price of oil, one of Canada‘s major exports, was pressured by rising supplies from major producers. U.S. crude prices settled 0.5% lower at $59.32 a barrel, while the U.S. dollar gained ground against a basket of major currencies, supported by higher U.S. Treasury yields.

Canadian government bond yields also climbed and the curve steepened, with the 10-year up 4.1 basis points at 1.502%.

 

(Reporting by Fergal Smith; Editing by Andrea Ricci)

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