New UWES articles, CPI data, and more!
Written By: Benjamin Pipicelli and Noel Tom Paul
Canada’s Economy at a Glance
Economics Society News, Events, and Articles
– Check out our latest original articles – Should Workers in the App-Based Gig Economy be Regulated as Employees? by Matthew Azevedo!
– Check out the Econ Study Lounge! Every Thursday from 6:30 PM – 8:30 PM in HH2034 Project Cube!
– The Stock Competition Sign-Up has closed! Keep an eye out for updates via our newsletters and Instagram! @uweconso
* All base prices are based on closing prices of Thursday February 9, 2023
News and Noteworthy
Recession Odds Recede as Labor Market, Economy Show Surprising Strength
After calling for a recession during the first half of last year and then for much of the latter half saying one was likely in 2023, some in the financial community are now reversing course. Wall Street titan Goldman Sachs, already an outlier with forecasts of a low probability of a recession, further downgraded the odds of a recession within the next 12 months to 25% from its prior 35% on Monday. The revision came after the government reported on Friday that the economy added 517,000 jobs in January, nearly three times the number that had been forecast. “Continued strength in the labor market and early signs of improvement in the business surveys suggest that the risk of a near-term slump has diminished notably,” the bank said in a research note. Read more
Pakistan seeks IMF bailout to stave off economic collapse
Pakistan is holding last-ditch talks with the International Monetary Fund (IMF) to secure help to stem a deepening economic crisis that has all but emptied its foreign exchange reserves. It has enough dollars to cover less than a month of imports at normal levels and is struggling to service sky-high levels of foreign debt. An IMF team is due to leave the country on Thursday after 10 days of talks with the government aimed at unlocking vital international funds. In January annual inflation soared to over 27%, the highest its been in Pakistan since 1975, and there are mounting fears for the economy in a pivotal election year. This week the rupee sank to a historic low of 275 to the dollar, down from 175 a year ago, making it more expensive for Pakistan to buy and pay for things. The lack of foreign currency is one of the most pressing of Pakistan’s problems. Read more
Israel urges crucial tech industry to separate politics from economy
Israel’s hard-right government is urging technology chiefs to separate politics from the economy as the coalition confronts a backlash from the vital sector over its contentious plans to reform the judiciary. Nir Barkat, economy minister, told the Financial Times that the government was willing to discuss the proposed changes to the judiciary with business leaders, but dismissed concerns that the reforms would affect investment in Israel or lead to tech companies pulling funds out of the country. “The fact that some people have differing political ideas, I basically say to them, ‘separate between our economy and the growth in the economy and some challenges in politics’,” he said. Read more
Sri Lankan leader appeals for patience amid economic crisis
Sri Lanka’s president on Wednesday appealed for patience amid the country’s worst economic crisis but promised brighter times ahead. President Ranil Wickremesinghe said in a policy speech after inaugurating a new parliamentary session that he had been forced to make unpopular decisions to salvage the country’s finances, including by implementing measures such as higher taxes. “Inflation rises during an economic crisis. The price of goods increases. Employment is at risk. Businesses collapse. Taxes increase. It is difficult for all sections of the society to survive. However, if we endure this hardship for another five to six months, we can reach a solution,” Wickremesinghe said. Read more
Given high inflation, slowdown in Canada’s economy is ‘a good thing,’ Tiff Macklem says
Bank of Canada governor Tiff Macklem says that although a slowing economy may not seem like a good thing, it is when the economy is overheated. Speaking in Quebec City on Tuesday, Macklem said that higher interest rates are working to cool the economy as elevated borrowing costs are constraining spending on big-ticket items such as vehicles, furniture and appliances. As demand for goods and services falls, Macklem says the economy will continue to slow. “That doesn’t sound like a good thing, but when the economy is overheated, it is,” he said. Read more
Ontario’s economy to slow sharply, but rebound next year: fiscal watchdog
Ontario’s economy will be “doom and gloom” before bouncing back next year, the province’s fiscal watchdog said Tuesday. In its latest outlook, the Financial Accountability Office of Ontario said the province’s economic growth is expected to slow sharply this year with a modest recovery beginning next year. The FAO’s economic and budget outlook report projects a deficit of $2.5 billion in 2022-2023, but says that will improve to billion-dollar surpluses through the remaining years of its projection to 2026-27. “We’re going to have a little bit more of the doom and gloom, but it’s not going to be as bad as I think people are afraid of,” said financial accountability officer Peter Weltman. Read more