Wreckage of Global Economy Now Looks Even Worse to IMF: Eco Week - Yahoo Canada Finance | Canada News Media
Connect with us

Economy

Wreckage of Global Economy Now Looks Even Worse to IMF: Eco Week – Yahoo Canada Finance

Published

 on


View photos

(Bloomberg) — Two months after its dire predictions of the steepest recession in almost a century, the International Monetary Fund will release new global economic forecasts this week that will probably look even worse.

Officials at the Washington-based Fund have warned that a revised outlook due on Wednesday may feature a more pessimistic view than in April. Back then, they said the “Great Lockdown” caused by the coronavirus would force a global contraction of 3% this year.

A gloomier forecast might reflect their assessment of the severity of damage caused by the widespread shutdown in activity. The U.K. economy, for example, instantly shrank by a fifth in April alone.

Any glimmers of hope the IMF can impart may channel optimism that the worst of the outbreak has passed in some countries, allowing them to ease restrictions. That would chime with purchasing manager indexes from Japan to Europe to the U.S., due on Tuesday, all of which are expected to show further improvement in sentiment and activity from historic lows.

What Bloomberg’s Economists Say…

“Rapidfire forecast updates reflect the shifting trajectory for the virus. Some countries — including China and Germany — have successfully bent the curve. Others have not. Add up that messy reality and — despite green shoots of recovery in May and June — the outlook continues to deteriorate”

— Tom Orlik, chief economist

However, most countries still face a long path back to normality from a downturn that is remarkably synchronized. IMF Chief Economist Gita Gopinath, who is compiling the forecasts, noted last week that both advanced and emerging market economies will endure a recession this year — the first time both have suffered in tandem since the Great Depression of the 1930s.

Click here for what happened last week and below is our wrap of what else is coming up in the world economy.

Europe, Middle East and Africa

June was the most open month in most of Europe after the lockdown, and a slew of activity indicators will give investors and policy makers a glimpse of how the economies are coping.

A key figure would be the purchasing managers’ index for the services industry, which was hit the hardest by the restrictions. Confidence data will be watched closely in Sweden amid an ongoing debate over its relatively lax approach to the Covid 19 pandemic.

The European Central Bank will also publish the accounts of its June meeting, which saw policy makers decide to expand the pandemic bond-buying program beyond market expectations. Look out for any meaningful dissenting voices among richer nations wary of extending unjustifiable support to the eurozone’s most vulnerable economies.

Elsewhere, Hungarian and Czech policy makers are expected to hold interest rates, while Turkey’s central bank is forecast to reduce its benchmark interest rate by another 25 basis points to 8% on Thursday, after a cumulative 1,575 basis points in cuts over the previous nine meetings.

South African Finance Minister Tito Mboweni will table an adjustment budget on Wednesday to redirect 130 billion rand ($7.5 billion) to a stimulus package, while, in Kenya, the central bank may ease after holding rates steady a month ago.

For more, read Bloomberg Economics’ full Week Ahead for EMEA

U.S.

In the U.S., investors will be watching several reports, including May new-home sales, durable goods orders and personal spending, to help them fine-tune their second-quarter GDP estimates.

The government will also issue its third estimate of first quarter GDP on Thursday, along with the closely watched jobless claims report. Meanwhile, Federal Reserve officials including James Bullard and Charles Evans, are due discuss the economy.

For more, read Bloomberg Economics’ full Week Ahead for the U.S.

Asia

New Zealand’s central bank has a policy announcement on Wednesday after data showed the economy is in its first recession since 2010. Thailand’s central bank meets later that day, with economists not expecting additional moves, according to early survey responses.

In the Philippines, a rate reduction is seen as possible on Thursday. South Korean trade data for the first 20 days of June will be scrutinized Monday for a pulse check on global commerce.

For more, read Bloomberg Economics’ full Week Ahead for Asia

Latin America

Latin America’s big economies are in the spotlight this week. On Tuesday in Brazil, the minutes of last week’s central bank meeting — policy makers cut the key rate to a record-low 2.25% — may clear up questions on forward guidance raised by the post-decision statement. Later in the day, Argentina’s first-quarter gross domestic product report will capture the early phase of what’s expected to be one the region’s deepest recessions of 2020.

On Thursday, the Brazilian central bank’s comprehensive quarterly inflation report updates forecasts for a wide range of scenarios, providing critical insight about the considerations informing monetary policy. Meanwhile, Mexico’s central bank, which lags behind regional peers in responding to the pandemic’s demand shock, will stick to gradual easing with a half-point cut to take the key rate to a still-restrictive 5%.

For more, read Bloomberg Economics’ full Week Ahead for Latin America

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="For more articles like this, please visit us at bloomberg.com” data-reactid=”60″>For more articles like this, please visit us at bloomberg.com

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Subscribe now to stay ahead with the most trusted business news source.” data-reactid=”61″>Subscribe now to stay ahead with the most trusted business news source.

©2020 Bloomberg L.P.

Let’s block ads! (Why?)



Source link

Continue Reading

Economy

Canada’s unemployment rate holds steady at 6.5% in October, economy adds 15,000 jobs

Published

 on

 

OTTAWA – Canada’s unemployment rate held steady at 6.5 per cent last month as hiring remained weak across the economy.

Statistics Canada’s labour force survey on Friday said employment rose by a modest 15,000 jobs in October.

Business, building and support services saw the largest gain in employment.

Meanwhile, finance, insurance, real estate, rental and leasing experienced the largest decline.

Many economists see weakness in the job market continuing in the short term, before the Bank of Canada’s interest rate cuts spark a rebound in economic growth next year.

Despite ongoing softness in the labour market, however, strong wage growth has raged on in Canada. Average hourly wages in October grew 4.9 per cent from a year ago, reaching $35.76.

Friday’s report also shed some light on the financial health of households.

According to the agency, 28.8 per cent of Canadians aged 15 or older were living in a household that had difficulty meeting financial needs – like food and housing – in the previous four weeks.

That was down from 33.1 per cent in October 2023 and 35.5 per cent in October 2022, but still above the 20.4 per cent figure recorded in October 2020.

People living in a rented home were more likely to report difficulty meeting financial needs, with nearly four in 10 reporting that was the case.

That compares with just under a quarter of those living in an owned home by a household member.

Immigrants were also more likely to report facing financial strain last month, with about four out of 10 immigrants who landed in the last year doing so.

That compares with about three in 10 more established immigrants and one in four of people born in Canada.

This report by The Canadian Press was first published Nov. 8, 2024.

The Canadian Press. All rights reserved.

Source link

Continue Reading

Economy

Health-care spending expected to outpace economy and reach $372 billion in 2024: CIHI

Published

 on

 

The Canadian Institute for Health Information says health-care spending in Canada is projected to reach a new high in 2024.

The annual report released Thursday says total health spending is expected to hit $372 billion, or $9,054 per Canadian.

CIHI’s national analysis predicts expenditures will rise by 5.7 per cent in 2024, compared to 4.5 per cent in 2023 and 1.7 per cent in 2022.

This year’s health spending is estimated to represent 12.4 per cent of Canada’s gross domestic product. Excluding two years of the pandemic, it would be the highest ratio in the country’s history.

While it’s not unusual for health expenditures to outpace economic growth, the report says this could be the case for the next several years due to Canada’s growing population and its aging demographic.

Canada’s per capita spending on health care in 2022 was among the highest in the world, but still less than countries such as the United States and Sweden.

The report notes that the Canadian dental and pharmacare plans could push health-care spending even further as more people who previously couldn’t afford these services start using them.

This report by The Canadian Press was first published Nov. 7, 2024.

Canadian Press health coverage receives support through a partnership with the Canadian Medical Association. CP is solely responsible for this content.

The Canadian Press. All rights reserved.

Source link

Continue Reading

Economy

Trump’s victory sparks concerns over ripple effect on Canadian economy

Published

 on

 

As Canadians wake up to news that Donald Trump will return to the White House, the president-elect’s protectionist stance is casting a spotlight on what effect his second term will have on Canada-U.S. economic ties.

Some Canadian business leaders have expressed worry over Trump’s promise to introduce a universal 10 per cent tariff on all American imports.

A Canadian Chamber of Commerce report released last month suggested those tariffs would shrink the Canadian economy, resulting in around $30 billion per year in economic costs.

More than 77 per cent of Canadian exports go to the U.S.

Canada’s manufacturing sector faces the biggest risk should Trump push forward on imposing broad tariffs, said Canadian Manufacturers and Exporters president and CEO Dennis Darby. He said the sector is the “most trade-exposed” within Canada.

“It’s in the U.S.’s best interest, it’s in our best interest, but most importantly for consumers across North America, that we’re able to trade goods, materials, ingredients, as we have under the trade agreements,” Darby said in an interview.

“It’s a more complex or complicated outcome than it would have been with the Democrats, but we’ve had to deal with this before and we’re going to do our best to deal with it again.”

American economists have also warned Trump’s plan could cause inflation and possibly a recession, which could have ripple effects in Canada.

It’s consumers who will ultimately feel the burden of any inflationary effect caused by broad tariffs, said Darby.

“A tariff tends to raise costs, and it ultimately raises prices, so that’s something that we have to be prepared for,” he said.

“It could tilt production mandates. A tariff makes goods more expensive, but on the same token, it also will make inputs for the U.S. more expensive.”

A report last month by TD economist Marc Ercolao said research shows a full-scale implementation of Trump’s tariff plan could lead to a near-five per cent reduction in Canadian export volumes to the U.S. by early-2027, relative to current baseline forecasts.

Retaliation by Canada would also increase costs for domestic producers, and push import volumes lower in the process.

“Slowing import activity mitigates some of the negative net trade impact on total GDP enough to avoid a technical recession, but still produces a period of extended stagnation through 2025 and 2026,” Ercolao said.

Since the Canada-United States-Mexico Agreement came into effect in 2020, trade between Canada and the U.S. has surged by 46 per cent, according to the Toronto Region Board of Trade.

With that deal is up for review in 2026, Canadian Chamber of Commerce president and CEO Candace Laing said the Canadian government “must collaborate effectively with the Trump administration to preserve and strengthen our bilateral economic partnership.”

“With an impressive $3.6 billion in daily trade, Canada and the United States are each other’s closest international partners. The secure and efficient flow of goods and people across our border … remains essential for the economies of both countries,” she said in a statement.

“By resisting tariffs and trade barriers that will only raise prices and hurt consumers in both countries, Canada and the United States can strengthen resilient cross-border supply chains that enhance our shared economic security.”

This report by The Canadian Press was first published Nov. 6, 2024.

The Canadian Press. All rights reserved.

Source link

Continue Reading

Trending

Exit mobile version