IMF managing director Kristalina Georgieva speaks during the World Government Summit at the Dubai Expo 2020, in Dubai, United Arab Emirates, on March 29.Ebrahim Noroozi/The Associated Press
The head of the International Monetary Fund warned Thursday that Russia’s war against Ukraine was weakening the economic prospects for most of the world’s countries and called high inflation “a clear and present danger” to the global economy.
IMF Managing Director Kristalina Georgieva said the consequences of Russia’s invasion was contributing to economic downgrades for 143 countries, although most of them should continue to grow. The war has disrupted global trade in energy and grain and is threatening to cause food shortages in Africa and Middle East.
Georgieva made her comments in a speech on the eve of next week’s spring meetings of the IMF and the World Bank in Washington.
An unexpectedly strong recovery from 2020′s pandemic recession has caught businesses by surprise, leaving factories, ports and freight yards unable to keep up with robust customer demand and forcing prices higher.
Chronically high inflation, which is forcing the world’s central banks to raise interest rates and likely slow economic growth in the process, amounts to “a massive setback for the global recovery,” Georgieva said.
Georgieva also warned of “the fragmentation of the world economy into geopolitical blocs,” with the West imposing far-reaching sanctions on Russia and China expressing support for the autocratic Russian regime of President Vladimir Putin.
“In a world where war in Europe creates hunger in Africa; where a pandemic can circle the globe in days and reverberate for years; where emissions anywhere mean rising sea levels almost everywhere – the threat to our collective prosperity from a breakdown in global co-operation cannot be overstated,” Georgieva said.
Before the war, Russia and Ukraine had supplied 28 per cent of global wheat exports. And Russia and Belarus accounted for 40 per cent of exports of the fertilizer potash.
“Now,” Georgieva said, “grain and corn prices are soaring, and leaders across Africa and the Middle East are telling me that supplies are running low. Food insecurity is a grave concern.
“We must act now with a multilateral initiative to bolster food security. The alternative is dire: More hunger, more poverty and more social unrest – especially for countries that have struggled to escape fragility and conflict for many years.”
Georgieva called on the world to support the Ukrainians and noted that the IMF had delivered $1.4-billion in emergency financing to help Ukraine meet its immediate spending needs. The IMF is also offering assistance to Ukraine’s neighbours, including Moldova, which has accepted more than 400,000 war refugees.
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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.
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.
OTTAWA – Statistics Canada says manufacturing sales in August fell to their lowest level since January 2022 as sales in the primary metal and petroleum and coal product subsectors fell.
The agency says manufacturing sales fell 1.3 per cent to $69.4 billion in August, after rising 1.1 per cent in July.
The drop came as sales in the primary metal subsector dropped 6.4 per cent to $5.3 billion in August, on lower prices and lower volumes.
Sales in the petroleum and coal product subsector fell 3.7 per cent to $7.8 billion in August on lower prices.
Meanwhile, sales of aerospace products and parts rose 7.3 per cent to $2.7 billion in August and wood product sales increased 3.8 per cent to $3.1 billion.
Overall manufacturing sales in constant dollars fell 0.8 per cent in August.
This report by The Canadian Press was first published Oct. 16, 2024.
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