New UWES articles, a stock contest update, CPI data, and more!
Written By: Ben Pipicelli and Noel Tom Paul
Canada’s Economy at a Glance
Economics Society News, Events, and Articles
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News and Noteworthy
Western sanctions on Moscow are working, says Russian economy veteran
Current Western Sanctions on the Russian economy have caused economic development to decline and usher in a period of technological stagnation, states Russian economy veteran Oleg Vyugin. Despite the expected 3% decline in GDP by the economy ministry being much lower than World Bank’s expectation of 11.2%, many industries are now falling behind due to the lack of imports in required equipment. As the world looks to limit usage of Russian oil and gas, the resulting impact on the Russian economy can cause serious harm to its GDP cycle. Read more.
Canada’s rising prices becoming entrenched, recession may be needed: economists
The underlying pressures driving inflation in Canada are likely to peak in the fourth quarter of this year, economists told Reuters, though most see signs fast rising prices are becoming entrenched and warn a recession may be needed to avoid a spiral. The broadening of price increases, increased wage settlements, as well as rising consumer and business inflation expectations are signs that inflation is becoming more entrenched in the economy, economists told Reuters. As a result, a more aggressive interest rate hike is required to bring down inflation. However, this would lead to a recession although many economists cast it as a mild downturn. Read more.
Recession fears shake Germany as energy costs hit business
Soaring energy and raw material costs have caused a major energy crisis in Germany with one of Germany’s largest consumer goods producers, Hakle, feared to be the first of many to go bust. Current sanctions on Russian oil and gas have greatly affected the German manufacturing sector with many businesses unable to cope with the speed at which energy costs are rising. German cha ncellor, Olaf Scholz, is currently travelling to the United Arab Emirates to secure supplies of liquefied natural gas in order to meet Germany’s energy demands. Read more.
TSX hits a 2-week low as Fed projections rattle investors
Canada’s main stock index, Toronto Stock Exchange (TSX), fell on Wednesday, Sept. 21 to its lowest level in more than 2 weeks. Of which includes declines for energy shares by 2.3%, oil shares by 1.2%, and financial shares by 1.2% as the U.S. Federal Reserved released a new interest rate hike to combat rising levels of inflation. Similarly, Wall Street’s main indexes dropped to a 3.00-3.15% range after the Federal Reserve lifted its policy range by 75 basis points. This also signaled more large increases to come in new projections showing its policy rate increasing ot 4.40% by the end of fiscal 2022. Read more.
Inflation is cooling, but the Bank of Canada isn’t done its fight: economists
The inflation landscape in Canada is cooling down faster than expected, but economics don’t expect the Bank of Canada to slow down its fight against inflation just yet. The annual inflation rate lowered to 7.0% in August, per Statistics Canada in the latest CPI report. This is 0.2% lower than the forecasted 7.2%. The slowdown can largely be attributed to the price of gasoline falling, however the price of food is still worrisome for many Canadians. Read more.
Canada to review impact of cannabis legalization four years on
After Canada became the first developed nation to legalize recreation marijuana in Oct. 2018, Canada recently announce on Thursday, Sept. 22 that they would launch a review of the country’s approach to legalization and evaluate its impact on youth, indigenous minorities, and other groups. This is to determine the effect on the economy and the illegal marijuana market. Canada’s health minister was required to conduct a review of the legalisation, its administration, and the operation 3 years after it being enacted, thus this review is occuring 1 year later than initially planned. Read More.