By The Associated Press - Tuesday, January 8, 2013 - 0 Comments
FRANKFURT – Experts surveyed by the World Economic Forum say rising income gaps between…
FRANKFURT – Experts surveyed by the World Economic Forum say rising income gaps between rich and poor and burgeoning government deficits are the risks most likely to have a global impact over the next decade.
Climate change, water shortages and aging populations rounded out the WEF’s top five risks.
The over 1,000 experts surveyed for the Switzerland-based forum’s annual risk report also warn that risk factors could combine to produce unique problems. These risk combinations included climate change putting a heavy burden on a global economy and a declining economy in turn hurting efforts to fight global warming.
The experts also identified increasing resistance of germs to antibiotics as a global health threat. Another new worry is a “digital wildfire” of wrong or controversial information going viral across online communities.
By Colin Campbell - Wednesday, December 19, 2012 at 8:40 AM - 0 Comments
A monthly scorecard on the state of the economy in North America and beyond
In approving the $15-billion takeover of Nexen Energy by China’s CNOOC, Stephen Harper cautioned that the sale was “the end of a trend.” Foreign ownership in the oil sands is okay, this time, but in the future, state-owned enterprises (SOEs) must be kept at bay, Ottawa ruled. The move was politically astute, but may prove economically dangerous. While attention has focused on whether we should fear SOEs like CNOOC and Malaysia’s Petronas (which also won approval to buy Progress Energy), the really scary question is: what will become of Canada’s oil sands without them?
As investors go, SOEs might not seem ideal. Critics argue they open the door to foreign governments dictating where our oil is sold and at what price. But Canada holds the trump card in the relationship through its ability to dictate royalty and tax rates, as well as labour and environmental laws that SOEs have to follow just like anyone else. Even if they decided to sell oil to China at less than market prices, the loss would be theirs, not ours.
The fact is that SOEs, not just in China but across Asia and the Middle East, rank among the few with the kind of money needed to fuel Alberta’s oil sands, where capital spending alone is expected to climb to more than $200 billion by 2025. They control 70 per cent of the word’s oil reserves, and 13 of the 20 biggest oil companies are state-run. This week, Natural Resources Minister Joe Oliver told the oil sands industry that investment will still flow into Alberta despite the recent ruling. Yet SOEs have been providing the bulk of the funding recently. Chinese SOEs have now sunk more than $25 billion into Canada’s energy sector since 2009. Ottawa is stressing that investment by SOEs is still welcome, just not ownership—not exactly an arms-open invitation.
By Colin Campbell - Wednesday, November 14, 2012 at 8:10 AM - 0 Comments
A monthly scorecard on the state of the economy in North America and beyond
Whatever faith there was left in the Canadian economic miracle, it is fast eroding. Everyone from bank economists to the parliamentary budget officer to the International Monetary Fund is cutting growth estimates. Last week’s report that GDP shrank in August by 0.1 per cent puts the annual growth rate somewhere below two per cent. The results are much the same in the U.S., where growth was two per cent last quarter, up from 1.3 per cent.
Diehard optimists will say any growth is good growth. But today’s climate is starting to feel suspiciously like a recession again.
In the U.S., recent growth has been attributed to a blip in government defence spending. Business investment hasn’t been as weak since 2009. In Canada, growth hangs on the prospect that manufacturing and mining will pick up steam again. How realistic is that? With 10 of 18 industries showing declining output in August, the GDP drop “was no fluke,” said Bank of Montreal chief economist Douglas Porter in a note. “The main message here is that the economy is struggling to churn out any growth whatsoever.” Continue…
By Elaine Kurtenbach, The Associated Press - Friday, October 12, 2012 at 10:21 AM - 0 Comments
TOKYO – Countries should not sacrifice growth for the sake of austerity, the head…
TOKYO – Countries should not sacrifice growth for the sake of austerity, the head of the International Monetary Fund told global financial leaders Friday, urging that the pace of government debt reduction be tempered by spending to help get the unemployed back to work.
Balancing those sometimes competing priorities is the central puzzle facing policymakers as the world economy slows further, even in dynamic Asia, IMF chief Christine Lagarde told finance leaders at the IMF and World Bank annual meeting in Tokyo.
Lagarde said she was “desperately optimistic” on prospects for a global recovery, while warning against backsliding on reforms needed to prevent future financial crises.
“The first priority, clearly, is to get beyond the crisis, and restore growth, especially to end the scourge of unemployment,” Lagarde said.
Greece, Spain and other European countries labouring under massive debts have slashed spending and raised taxes, seeking to restore confidence in their public finances and qualify for emergency financing. The economies of financially healthier European countries, such as Germany and Finland, face a potential blow to growth if those troubled economies fail to get their financial houses in order. At the same time, the recovery of the 17-nation grouping that uses the euro could founder if tax increases and spending cuts bite too deeply.
While there seems to be a wide consensus on long-term strategies for reform, there is less agreement how painful such policies should be in the near-term given the persistent risk of recession and surging unemployment.
By Elaine Kurtenbach, The Associated Press - Tuesday, October 9, 2012 at 10:02 AM - 0 Comments
TOKYO – Plagued by uncertainty and fresh setbacks, the world economy has weakened further…
TOKYO – Plagued by uncertainty and fresh setbacks, the world economy has weakened further and will grow more slowly over the next year, the International Monetary Fund says in its latest forecast.
Advanced economies are risking recession while the economic malaise is spreading to more dynamic emerging economies such as China, the international lending organization says in a quarterly update of its World Economic Outlook.
The IMF forecasts that the world economy will expand 3.3 per cent this year, down from its estimate of 3.5 per cent growth issued in July. Its forecast for growth in 2013 is 3.6 per cent, down from 3.9 per cent three months ago and 4.1 per cent in April.
For the United States, the IMF raised its growth forecast slightly, to 2.2 per cent this year from two per cent in July. For 2013, though, it expects U.S. growth of 2.1 per cent, down from 2.3 per cent.
The IMF projected growth in Canada this year of 1.9 per cent, improving slightly to two per cent in 2013. That compared with the July forecast that saw growth at 2.1 per cent for 2012 and 2.2 per cent for 2013.
The IMF said growth in Canada has been constrained by the sluggish U.S. economy.
“Domestic demand — both business investment and private consumption — has been supported by exceptionally favourable financing conditions, including low interest rates and credit availability,” the IMF said.
By Erica Alini - Friday, July 13, 2012 at 10:51 AM - 0 Comments
The global economy is in dire straits. Fiscal woes and persistently high unemployment are hampering the recovery in the developed world. Emerging economies like China and India are once again confronted with weaker demand for exports from rich countries, but they are also grappling with a host of domestic troubles. High oil and food prices aren’t helping. The IMF announced last week it is planning to revise down its global growth forecast for the rest of 2012, and one famed economist warned of a “perfect storm” threatening the world economy. Use the interactive chart below to see which countries and regions face the worst turbulence, and who’s still enjoying sunny skies.
Infographic by: Amanda Shendruk.