Chrystia Freeland released her fall economic statement this week. Kevin Page and his colleagues write that she is forecasting a rough road ahead:
There are three overarching strategic messages in the fall statement.
On the economy: global economic uncertainty is high. High inflation must be addressed. The Canadian economy is headed for a slowdown. Inflation is expected to have peaked. We are estimated to be a year away from having inflation rates within the Bank of Canada’s mandated target range (1 to 3 percent).
On policy: in the current high inflation environment, federal spending must be restrained. New measures must be targeted to help vulnerable people address affordability challenges. The transition to a more competitive, greener, more inclusive and resilient economy is ongoing — new measures are required to stimulate investment and growth, particularly in light of the recent US initiatives (i.e., the US Inflation Reduction Act). More will follow.
Finance officials, who crafted the fall statement, are arguing that the updated fiscal plan represents a steady hand in turbulent times. Normalized (small) budgetary deficits and a declining debt-to-GDP ratio will help ensure flexibility to address the impacts of a possible recession and will allow additional public spending in the (low-inflation) future to support growth and job creation.
Prospects for a global slowdown are increasing. High inflation and rising interest rates are expected to slow demand significantly. Prospects for growth have diminished in China (due to COVID) and Europe (due to Russia’s war on Ukraine and energy supply). Finance Canada has developed their own independent downside scenario: The recession starts early in 2023. Growth shrinks on average 0.9 percent in 2023. There is no upside scenario. This is an unusual development (i.e., risks in baseline outlook are not symmetrical) for Finance. The dark clouds are within view.
Buckle your seat belts. This is going to be no vacation cruise.
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10 comments:
At the ripe age of 69, I view this (predicted) bust as just the latest iteration of our endless boom/bust cycles that capitalism, esp. real estate and resource exploration, drives.
Small ex:
BC is worried our sawmills will go idle in the home building bust. Given the housing crisis, a rational species would be building public housing to give home-seekers and sawmills a win-win.
it's almost like we deserver what's coming.
As long as we allow the wealthy to call the shots, PoV, the boom-bust cycle will continue.
Golden rule "He who has the gold makes the rules".
I always thrived in the bust cycles being frugal anyway; and as renovations and repairs (my forte) became the rule rather than bulldoze and rebuild.
Retired with minimum fixed income might be a little different but was saving about 500 out of 1700/month before so there seems like there is some cushion.
The fictitious 11% inflation rate seems to not include my groceries where 100% jump on an item this year is not uncommon.
I get how it is so hard for so many but you just can't have it ALL; you might have to learn to cook and fix a zipper or wear that more than twice and there were consequences to your spending and choices and this is it.
Back in the day a friend and I spent the same amount of money on the same weekend
He bought a firebird , I bought a house
His rent and utilities today 2300; mine 400
And the beat goes on ... fun times
Some people do better at facing hard times than others, lungta.
We're just so glad we shut down the economy for the common cold, gummed up supply lines across the globe, restricted all things having to do with hydro-carbon fuels, provoked Russia into moving militarily and then blocking all those cheap commodities they offered, only to get a chance to bail out the banks again while conjuring the largest amount of thin-air currency ever before seen.
Oh so very swiftly came the returns when the exceedingly responsible Bill Morneau was replaced for not toeing with the party by the consummate media shiller, Freeland, at finance.
As well it great fun being divided and set upon by opponents for all those trumped-up marxian reasons.
And now that they've pulled the rug out from underneath the economy, we can all take consolation knowing that we fought off the plague with war-time strength and our now a healthier, 5-times-boosted gmo society.
Right?
There's a lot in there, Carey. But COVID was no common cold. And because the pandemic was worldwide, it was bound to cause worldwide problems.
Come now, Owen. Covid-19 was just a slightly nasty version of the common cold just as the Black Death was a slightly bad case of the flu. Everyone would have been fine except they were conned into getting those nasty vaccines that are killing all those athletes.
I am getting so used to booster shots that I was surprised to see I have now had five, I thought it was only four.
My wife and I also have had five, jrk, and -- surprise, surprise -- they did us no harm.
Sars CoV 2 is a blood disease, not a respiratory disease, that randomly destroys some of your 60 miles of veins and arteries, sometimes attacking the lungs hence the "flu" connection and the blood clots.
Other things it attacks can get a lot of damage before you really notice. (example/my heart was 20% efficient before surgery and still working)
Because your arteries and veins have NO PAIN receptors covid does its' damage (which will be additive) often with few symptoms and Bills You Later. Death by a 1000 cuts comes to mind.
Good luck with "It never hurt me" anti-vax crew.
The Game is in the first innings.
You think health care is in crisis now? Give it few years.
The anti-vaxers by being anti- vaxers will make sure that this crisis lasts as long as humanly possible.
I'm at shot 6...3 original(druggist accident) and 3 boosters.
.
The anti-vaxers will pay a price, lungta. We all will.
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