Good news for the global economy in 2024? Here's the OECD's forecast - Euronews

Euronews Business take a look at what the OECD projects in its latest analysis of the major global trends and prospects for the next two years.

Stronger-than-expected GDP growth in 2023 is about to slow down as tighter financial conditions, weak trade growth and lower business and consumer confidence continues to take its toll on global economies, the Organisation for Economic Co-operation and Development's (OECD) has said.

In its latest economic outlook report, the OECD projects in its twice-yearly analysis of the major global trends and prospects for the next two years, a soft landing for advanced economies. 

Globally, it predicts growth will to ease to 2.7% in 2024, from 2.9% this year, before picking up to 3% in 2025, due to real income growth recovery and lower interest rates.

Before, however, the OECD had forecast a slowdown of growth due to weak PMI readings (survey showing business sentiment) in many major economies, slowing credit growth and persistently low levels of consumer confidence.

The pace of growth is uneven

Advanced economies face generally slower growth than emerging markets, and Europe’s performance is lagging behind North America and major Asian economies.

Europe, where the economy is closely affected by high-interest rates and where higher energy costs drag on incomes, faces a particularly difficult path to fully recover.

By contrast, GDP growth has held up better in the United States and many other commodity-producing economies. The emerging market and developing economies have collectively maintained growth rates close to those seen prior to the pandemic.

According to the OECD, the eurozone can look forward to 0.5% annual GDP growth for the last three months of 2023. The bloc's GDP is expected to swell by 0.6% this year, followed by 0.9% in 2024 and 1.5% in 2025 respectively.

Growth is dragged down in Europe, where the importance of bank finance is relatively high and the pressure on incomes from higher energy costs has been particularly strong. Looking ahead, however, consumption is expected to be strong due to tight labour markets and increasing real incomes as inflation is slowing.

On the other hand, the forecast also estimates that the full impact of tighter monetary policy in the bloc is still to appear and activity may be hit more strongly than expected.

Inflation is easing but remains a concern

Headline inflation has fallen almost everywhere over the past year, mainly affected by a moderate level of energy prices in the first half of 2023.

However, cuts by key OPEC+ economies and supply disruptions in the oil market resulted in higher oil prices since June. This combined with the uncertainty due to rising geopolitical tensions is currently clouding inflation prospects. 

Core inflation is estimated to have fallen below 3% in the G7 economies as a whole in the third quarter of 2023, compared to the previous quarter, slowing down from over 4.25% during the first half of the year.

According to the OECD, inflation in the Eurozone is going to slow to 2.9% next year following 5.5% this year and will settle at 2.3% in 2025.

The ECB’s target of 2% is not a reality for another two years, the outlook signals 2.1% only for the very end of the examined period; the last three months of 2025.

Unemployment remains low

Across the OECD countries, unemployment rates remain low with an expected 5.1% for both 2024 and 2025.

The rate is forecast to increase in the United States, the United Kingdom, Canada and Australia. However, in Japan and the eurozone unemployment is expected to remain low and close to current levels of 6.5%.

Labour force growth has remained strong globally, there is a slowdown in annual employment growth, lower vacancies, and in some cases a mild upturn in unemployment rates.

Currently, tight labour markets keep supporting private consumption. However, parallel to this, private investment is projected to be dragged down by high-interest rates. 

This also has an impact on the housing market, real-estate investment was generally weak among OECD economies in the second half of 2022 and the first half of this year amidst high mortgage rates. The increase in prices has slowed since the end of 2022 and in some cases reversed. As for Europe, sales and investment haven't dropped yet but continue to soften.

Economic consequences of Israel-Hamas crisis

A broadened conflict in the Middle East could overwrite the current global economic expectations, particularly for European economies where shocks are proving to be highly tangible via elevated energy and food prices.

Overshadowing the global economic prospects, a wider conflict in the Middle East could create significant disruptions to energy markets and major trade routes, and if the financial markets price in the additional risk, that would slow growth further and add to inflation eventually. 

An upward drift in inflation expectations could drive central banks to keep policy rates higher for longer than expected, which comes with tighter credit standards slowing further spending, and resulting in rising unemployment and bankruptcies.

“We must revive global trade”

"Global trade is weak," OECD chief economist, Clare Lombardelli , said. The OECD estimates that global trade of goods and services is estimated to have grown by only 0.1% in a yearly comparison in the first half of 2023.

The sector has been hit by rising trade restrictions, protectionist policies and the restructuring of global value chains. The uncertain outlook for global trade is a key concern, given its importance for productivity and development.

The OECD also urged multilateral cooperation to revive global trade.

What is there to do to support long-term growth?

The global economy is on the path to inflation returning to target without a marked growth slowdown or a sharp rise in unemployment, resulting in better-than-expected growth in 2024. 

In order to maintain this prospect, the OECD suggests keeping up with the current tight monetary policy until there are clear signs that inflation is kept under control, leaving room for some additional rate rises if needed.

"The need to maintain downward pressure on inflation will limit scope for policy rate reductions until well into 2024," the report said.

The OECD is also urging prudent fiscal policy, noting that governments face rising costs to refinance their mounting debts while juggling additional spending on ageing populations, the climate transition and defence.

Some of the strongest economies in the Eurozone have seen their sovereign borrowing costs skyrocketing in the past year, Germany's 10-year bond yields are mounting ever closer to 3% while Italy surpassed 4.5% recently.

In order to avoid future shocks, clear spending and tax plans are important, and strengthening investment, particularly "faster progress towards decarbonisation is also essential," the report also highlighted.

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Good news for the global economy in 2024? Here's the OECD's forecast - Euronews
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Poor Marks for Biden: Middle East, Economy, Foreign Affairs - Gallup

Story Highlights

• 37% approve, 59% disapprove of Biden, unchanged from last month’s ratings
• 32% approve of Biden’s handling of foreign affairs, economy, Middle East conflict
• Democrats’ ratings of Biden worst for the Middle East conflict

WASHINGTON, D.C. -- President Joe Biden’s job approval rating remains at 37%, tying his personal low, with disapproval at 59%. Approval ratings of the president’s handling of healthcare (40%) and the situation in Ukraine (38%) are similar to his overall rating, while fewer, 32% each, approve of his handling of the economy, foreign affairs, and the situation between the Israelis and Palestinians.

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Gallup’s Nov. 1-21 poll marks the third time Biden’s overall job approval rating has been at 37%. All three instances have occurred in 2023 -- the first in April and the second in October. Biden’s job rating has not risen above 44% since August 2022 and has averaged 40% this year.

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Gallup has measured Biden’s ratings on the economy and foreign affairs 10 times since he took office in 2021, and his ratings on the two issues have followed similar trajectories. Yet, in 2022, when inflation was at a 40-year high, and earlier this year, Biden’s foreign affairs ratings were significantly better than his economic ratings.

Biden’s current rating on the economy is just one percentage point higher than his lowest in 2022, while his foreign affairs rating is the lowest by six points.

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Biden continues to navigate the United States’ role in wars between the Israelis and Palestinians and Russia and Ukraine, and he garners weak ratings for his handling of each. Americans’ current rating of the president’s handling of the situation in Ukraine is the lowest of four taken by Gallup and is down nine points since August.

The latest poll marks the first time Gallup has asked about Biden’s handling of the situation in the Middle East that erupted when Hamas militants invaded Israel on Oct. 7.

Democrats’ Ratings of Biden Worst on Middle East Conflict

While majorities of Democrats approve of Biden’s overall job performance and his handling of all five issues, their approval is lowest for the situation between the Israelis and Palestinians. In all, 60% of Democrats approve of his handling of the conflict, reflecting intraparty tensions over Israel’s right to defend itself against Hamas versus prioritizing the safety of Palestinian civilians. A separate question in the poll finds that 36% of Democrats approve of Israel’s military action against Hamas.

Meanwhile, two-thirds of Democrats approve of Biden’s job on foreign affairs, and roughly three-quarters each approve of his handling of the economy, healthcare policy and the situation in Ukraine. At the same time, no more than 16% of Republicans or 35% of independents approve of Biden’s handling of any of the issues. Republicans are most approving of Biden’s handling of the Middle East situation, while independents give him his best marks on healthcare policy.

More than four in five Democrats, 83%, approve of Biden’s overall job performance, compared with 5% of Republicans and 27% of independents.

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Biden Approval Recovers Among Democrats but Falters Among Independents

After dropping 11 points last month, Democrats’ latest approval rating of Biden has rebounded and is up eight points to 83%. Still, it falls short of the nearly unanimous approval Biden enjoyed from his party during the first 11 months of his presidency.

Meanwhile, Biden’s approval rating from political independents has dropped eight points over the past month to a record-low 27% for that group, while he continues to earn minimal approval, just 5%, from Republicans.

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Bottom Line

With less than a year to go until the presidential election, Biden continues to receive tepid ratings from the American public. His overall job approval rating is still at his personal low and is in historically dangerous territory for an incumbent seeking reelection. In addition, political independents’ record-low rating of Biden is striking. Biden’s even weaker ratings on the economy, foreign affairs and the Middle East suggest that his performance in these areas is dragging down his overall job performance rating.

Explore President Biden's approval ratings and compare them with those of past presidents in the Gallup Presidential Job Approval Center.

To stay up to date with the latest Gallup News insights and updates, follow us on X.

Learn more about how the Gallup Poll Social Series works.

View complete question responses and trends (PDF download).

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'People have just rendered a judgment': Inflation erodes Biden's wins - POLITICO

Affordability concerns have been enough to keep Biden’s polls on the economy deeply underwater. | Win McNamee/Getty Images

By Sam Sutton

11/29/2023 09:29 AM EST

Updated: 11/29/2023 01:26 PM EST

President Joe Biden may soon bear witness to an economic miracle: Inflation has slowed and Wall Street is bullish about the chances of the U.S. avoiding a recession next year despite the Federal Reserve’s record rate hikes.

But achieving a so-called soft landing might not mean a lick to voters

When it comes to Biden and the economy, it’s possible that “people have just rendered a judgment and are not revisiting the judgment,” said James Carville, the Democratic campaign guru who made “it’s the economy, stupid” the unofficial motto of Bill Clinton’s 1992 presidential campaign.

Low unemployment, real wage growth and a fast-growing economy should be providing a boost to the public’s perception of Biden’s economic policies. It hasn’t, as countless polls demonstrate. But with inflation still climbing — albeit at a much slower rate than last year — affordability remains a top concern for voters. And that’s been enough to keep Biden’s polls on the economy deeply underwater.

The result?: “People’s attitudes about the economy are pretty stubbornly in the wrong place” for the president, Carville said.

Those attitudes won’t change if other gauges that typically define the political economy — payrolls, GDP growth and consumption — deteriorate. All three have remained healthy even as the Consumer Price Index cratered from more than 9 percent last year to a little more than 3 percent as of October. The Commerce Department on Wednesday estimated that the U.S. economy grew by 5.2 percent during the third quarter — a remarkable expansion that underscores Biden’s case that his agenda has kept the country on solid footing following the global pandemic.

On Thursday, Commerce will report the personal consumption expenditures price index — the Fed’s preferred measure of inflation — for October.

Some economic models have forecast that a slowdown in growth could eat away at the president’s share of the vote in 2024.

“Models based on growth & unemployment may not apply this time,” Monmouth University’s polling director Patrick Murray told POLITICO in a text message.

“We do know he is NOT getting credit for good jobs numbers and decent growth BECAUSE of inflation. If unemployment goes up, will Biden get enough credit for deflation that jobs and growth don’t matter to voters? We just don’t know,” Murray said.

White House officials say they’re hopeful the economy will continue to expand even as inflation falls closer to the Fed’s 2 percent target — National Economic Council Director Lael Brainard notes that inflation averaged about 2.9 percent in the two decades prior to the pandemic — and workers feel the effects of wages rising faster than price increases.

“If the question is whether this White House—or the American people—would welcome continued falling inflation accompanied by continued strength in the labor market, the answer is unambiguously yes,” White House spokesperson Michael Kikukawa said. “While some forecasters once predicted a 100% chance of recession, President Biden’s policies are now being credited with helping prevent such a downturn as inflation has fallen.”

Another boost could come if the Fed cuts rates next year. One White House official who was granted anonymity to speak frankly observed that markets have increasingly priced in rate cuts, which would bring down mortgage rates and reduce borrowing costs for consumers and businesses.

The economic indicators that determine a “soft landing” matter less than how people actually experience the economy, another White House official told POLITICO. If prices climb at a level that feels normal, the public’s concerns about the state of the economy should ease, the official said.

But that’s also why inflation has been so hard for Biden to shake — even with the greater likelihood of a soft landing.

“On the inflation front, at this point, I think the die has already been cast,” said Alec Phillps, the chief U.S. economist at Goldman Sachs, in an interview. “There’s probably not that much of a difference between, 2.5 percent inflation and 3.5 percent inflation from a political perspective.”

For now, there’s little sign of public sentiment on the economy improving. While consumer confidence rebounded in November, and a growing number of people are feeling good about their own financial situation, the Conference Board’s regular survey also found that about two-thirds still believe a recession is “somewhat” or “very likely” to occur in the next year.

“There is a great disconnect between how people perceive their own personal circumstances and how they perceive how the nation as a whole is doing,” said David Kelly, the chief global strategist and head of the global market insights strategy team at J.P. Morgan Asset Management. That’s unlikely to change with the deluge of negative headlines about the economy from many news outlets.

“I think a lot of it has to do with the way people imbibe information in 2023,” he said. “And if that’s the case, it doesn’t matter what the economy does next year. People are going to think the economy is awful.”

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'People have just rendered a judgment': Inflation erodes Biden's wins - POLITICO
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Highland Copper Estimates the Economic Contribution of the Copperwood Project to Local and State Economies - Financial Post

Article content

VANCOUVER, British Columbia, Nov. 29, 2023 (GLOBE NEWSWIRE) — Highland Copper Company Inc. (TSXV: HI; OTCQB: HDRSF) (“Highland” or the “Company”) is pleased to announce the results of the recently completed Economic Contribution Analysis for the Copperwood Project.

The Company retained Public Sector Consultants (“PSC”) out of Lansing, Michigan to perform the analysis, based on expenditure projections from the Copperwood Project Feasibility Study issued earlier this year. PSC conducted two analyses using an input-output modelling tool, Impact Analysis for Planning (“IMPLAN”), to model the estimated direct, indirect and induced economic contributions of the project during the construction phase and separately, the annual economic contribution of the operating mine if Highland proceeds with the development of Copperwood. A construction decision depends on multiple factors including Highland’s ability to attract project financing.

Article content

The modelling tool, IMPLAN, traces the transactions among and between different sectors to quantify how an activity in one part of the economy affects another, allowing PSC to analyze the expected economic contribution of the Copperwood project to the local economy of the Upper Peninsula (“U.P.”), and also, more broadly, its contribution to the economy of the State of Michigan.

Key Highlights

Construction:

• Projected to spend approximately $425 million over the course of the three-year construction phase if project development is initiated.
• The three-year construction is expected to directly support approximately 300 jobs on-site as well as another 159 jobs at vendor partners in Michigan. Most of these jobs are projected to be in the U.P.
• Indirect and induced purchases made by households and businesses driven by the construction spending are expected to support approximately 353 jobs statewide, with many being in the U.P.
• The analysis estimates that the construction of Copperwood will add approximately $74 million to Michigan’s gross state product each year during this three-year phase.
• The investment on the Copperwood construction is expected to generate an average of approximately $4.5 million in local, county and state tax revenue annually.

Article content

Steady-state Operations:

• If the project proceeds to operations, the Copperwood Mine expects to provide employment to approximately 380 individuals at or near the site in Wakefield Township, Michigan.
• It is estimated that operational spending of the mine could support an additional 313 indirect and induced jobs throughout Michigan.
• The analysis indicated that operational expenses are expected to increase spending to Michigan businesses by approximately $130 million annually.
• Operation spending is expected to generate approximately $12 million in local, county and state tax revenue annually.

“It is Highland’s goal to contribute positively to the economies of the local Upper Peninsula communities and State of Michigan where we intend on operating. The potential economic contributions are significant through the creation well-paying jobs, indirect economic activity, and taxes to support local infrastructure.” stated Barry O’Shea, Interim CEO. “At the same time, we look forward to contributing to critical US domestic copper supply and supporting the ongoing energy transition.”

Article content

About Highland Copper Company

Highland Copper Company Inc. is a Canadian company focused on exploring and developing copper projects in the Upper Peninsula of Michigan, U.S.A. The Company owns the Copperwood deposit through long-term mineral leases and 34% of the White Pine North project. The Company also owns surface rights securing access to the deposit and providing space for infrastructure as required. The Company has 736,363,619 common shares issued and outstanding. Its common shares are listed on the TSX Venture Exchange under the symbol “HI” and trade on the OTCQB Venture Market under symbol “HDRSF”.

More information about the Company is available on the Company’s website at www.highlandcopper.com and on SEDAR at www.sedar.com.

Cautionary Note Regarding Forward-Looking Information

This news release contains “forward-looking statements” and “forward-looking information” (collectively “forward-looking statements”) within the meaning of applicable Canadian securities legislation. These statements include, without limitation, statements with respect to: (a) anticipated construction costs and timeframe for construction of the Copperwood Project; (b) projected employment for both construction and operation of the Copperwood Project; (c) the projected tax and GDP benefits of the Copperwood Project; and (d) the anticipated economic benefits to the local and state economies resulting from the construction and operation of the Copperwood Project. The forward-looking statements were prepared based on the Company’s construction and operation budget for the Copperwood Project, which are summarized in the Company’s technical report entitled “Feasibility Study Update Copperwood Project Michigan, USA” dated April 20, 2023 available on SEDARPlus (the “Technical Report”). The forward-looking statements are subject to a number of assumptions, including those set out in the Technical Report, assumptions regarding the location of employees and sources of products and services, and assumptions built into the IMPLAN’s model for projecting direct and indirect benefits. These underlying assumptions may prove to be incorrect. Important factors that could materially impact the Company’s expectations include: uncertainties timing of development of the Copperwood Project; changes in project parameters as plans continue to be refined; availability of services, materials and skilled labour to complete construction and operate the Copperwood Project; effects of regulation by governmental agencies; unexpected cost increases, which could include significant increases in estimated capital and operating costs and the effects of inflation; fluctuations in metal prices and currency exchange rates; construction and other delays, construction, operating and reclamation costs varying significantly from those estimated or projected, general market and industry conditions, and the risks set out in the Company’s public disclosure documents filed on SEDARPlus. Although the Company believes that the assumptions and factors used in preparing the forward-looking statements in this news release are reasonable, undue reliance should not be placed on forward looking statements. All forward-looking statements in this press release are based on information available to the Company as of the date hereof, and the Company undertakes no obligation to update forward-looking statements except as required by law.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

For further information, please contact:

Barry O’Shea, Interim CEO
Email: info@highlandcopper.com 
Website: www.highlandcopper.com

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US economic growth for last quarter is revised up to a 5.2% annual rate - Halifax.CityNews.ca

WASHINGTON (AP) — Shrugging off higher interest rates, America’s consumers spent enough to help drive the economy to a brisk 5.2% annual pace from July through September, the government reported Wednesday in an upgrade from its previous estimate.

The government had previously estimated that the economy grew at a 4.9% annual rate last quarter.

In the current fourth quarter, though, economists say growth is likely slowing sharply from the cumulative effects of higher borrowing rates on consumer and business spending. TD Economics, for example, expects growth in the October-December period to come in at a 1.8% annual rate.

Wednesday’s second estimate of growth for the July-September quarter confirmed that the economy sharply accelerated from its 2.1% rate from April through June. It showed that the U.S. gross domestic product — the total output of goods and services — grew at its fastest quarterly rate in nearly two years.

Consumer spending, the lifeblood of the economy, rose at a 3.6% annual rate from July through September — still healthy but a downgrade from the previous estimate of 4%. Private investment surged at a 10.5% annual pace, including a 6.2% increase in housing investment, which defied higher mortgage rates.

The economy also received a lift from companies building inventories in anticipation of future sales, which added 1.4 percentage points to quarterly growth. Also driving the third quarter growth was an uptick in spending and investment by governments at all levels — federal, state and local.

The U.S. economy, the world’s largest, has proved resilient even as the Federal Reserve has raised its benchmark interest rate 11 times since March 2022 to fight the worst bout of inflation in four decades. Those higher interest rates have significantly increased consumer and business borrowing costs. But they have also helped ease inflationary pressures: Consumer prices rose 3.2% last month from 12 months earlier, a marked improvement from the 9.1% year-over-year inflation recorded in June 2022.

The U.S. job market is cooling from the red-hot levels of the past two years. But it’s still healthy by historical standards: Employers are adding an average of 239,000 jobs a month this year. And the unemployment rate has come in below 4% for 21 straight months, the longest such streak since the 1960s.

The combination of easing inflation and resilient hiring has raised hopes the Fed can manage a so-called soft landing — raising rates just enough to cool the economy and tame price increases without tipping the economy into recession.

“We continue to forecast ongoing expansion in economic activity, but the pace should slow quite significantly” in the current fourth quarter, said Rubeela Farooqi, chief U.S. economist at High Frequency Economics. ”We anticipate a deceleration in household spending, not only on payback for an unusually strong third quarter but also from the cumulative effects of monetary policy tightening.”

The Organization for Economic Cooperation and Development forecast Wednesday that the U.S. economy will expand just 1.5% in 2024, down from 2.4% in 2023, as the Federal Reserve’s interest rate increases — 11 of them since March 2022 — continue to restrain growth.

Paul Wiseman, The Associated Press

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US economic growth for last quarter is revised up to a 5.2% annual rate - Halifax.CityNews.ca
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Minister Beech Highlights Clean Economy Initiatives in Edmonton - Yahoo Canada Finance

EDMONTON, AB, Nov. 27, 2023 /CNW/ - Today, the Honourable Terry Beech, Minister of Citizens' Services, met with groups in Edmonton to discuss how the government's economic plan will build a robust, clean economy, as part of the 2023 Fall Economic Statement.

The government's economic plan is building a strong economy that works for everyone—with good jobs that people can count on. This plan is evidenced by the significant progress in clean economy projects. Over the past three years, more than 90 clean growth projects valued at over $40 billion are underway, attracting investments and creating jobs.

In response to global economic challenges, the 2023 Fall Economic Statement is focused on supporting Canadians and fostering economic growth through clean initiatives. This includes introducing clean economy investment tax credits for industries such as carbon capture and clean technology, and broadening the eligibility for investment tax credits to encompass systems that generate electricity or heat from waste biomass.

With more than $1 trillion in private capital available for investment, Canada is well-equipped with critical resources, including minerals, innovative research, and a skilled workforce. The clean economy jobs plan, detailed in the 2023 Fall Economic Statement, aims to leverage these competitive advantages to attract investment and create jobs across the country.

The 2023 Fall Economic Statement also proposes expanding eligibility for the Clean Technology and Clean Electricity Investment Tax Credits to support using waste biomass to generate heat and electricity.

The Government of Canada is committed to working alongside a broad range of partners to build an economy that is strong, sustainable, and beneficial for every Canadian.

Quotes

"Canada's commitment to a clean economy is more than an environmental imperative – it's an economic opportunity. Our focus on clean growth, as shown in the 2023 Fall Economic Statement, will lead to innovative solutions, new industries, and thousands of jobs. We're not just securing a cleaner environment, but also a prosperous, inclusive future for Canadians."
- The Honourable Terry Beech, Minister of Citizens' Services

"Our economic plan is about building a strong economy that works for everyone, and this Fall Economic Statement is the next phase of our plan. With a focus on supporting the middle class and building more homes, faster, we are taking action on the priorities that matter most to Canadians today—and we will continue doing everything we can to deliver for Canadians from coast to coast to coast."
- The Honourable Chrystia Freeland, Deputy Prime Minister and Minister of Finance

Quick Facts

• New measures in the 2023 Fall Economic Statement are built upon the government's responsible economic plan, which sees Canada maintain both the lowest deficit- and net debt-to-GDP ratios in the G7.

• Canada's economic plan is working:

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Canada’s big banks likely to end financial year with another profit drop: analysts - Global News

Canada’s big banks are likely to wrap up a challenging financial year with another quarter of declining profits and rising bad debt provisions amid a slowing economy.

The big six banks have axed thousands of jobs this year as investment banking fees lagged and business south of the border weakened due to the U.S. regional banking crisis.

While high interest rates have boosted the banks’ lending margins, residential mortgages, auto loans and commercial real estate loans have slowed as consumers and businesses pulled back.

0:34 Canada’s economy flat in July, signs of growth in August: StatCan

The fallout from high borrowing costs on commercial real estate lending and auto loans as well as the renewal of nearly C$900 billion of residential mortgages starting next year will weigh on banks.

“Investor focus would be on potential for expanding net interest margins to offset slowing loan growth and rising credit costs,” BofA analyst Ebrahim Poonawala said.

Provision for credit losses (PCLs), the money banks set aside to cover bad loans, is expected to grow at least 39 per cent at National Bank and more than double at Bank of Montreal, which acquired U.S lender Bank of the West earlier this year.

Profits at the big six banks are expected to shrink an average 3% from a year ago as PCLs climb and revenue growth slows, KBW analyst Mike Rizvanovic projected. He lowered his forecast for fiscal year 2024 earnings.

“We continue to see a challenging environment for the group heading into fiscal 2024,” Rizvanovic said, noting that higher PCLs, a prolonged mortgage renewal cycle and the impact of high interest rates on consumer lending would curtail balance sheet growth.

Banking stocks have lost between one and 10 per cent so far this year, compared with a 3.7 per cent rise in the benchmark Canada share index.

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Refinancing of home loans is expected to bring a lot of pain to customers who took out cheaper mortgages during the pandemic. With interest rates forecast to remain high, renewal of the mortgages will squeeze household budgets.

3:50 Risk of recession with higher interest rates: Jason Childs

Banks are also rethinking lending to industries sensitive to high interest rates, from condo development to office space.

“We want to make sure we have some kind of confidence when a project is going to go ahead,” said Victoria Girardo, Canadian Western Bank’s VP in real estate lending.

In Toronto alone, developers have delayed launching nearly 14,000 condo units so far this year, according to Urbanation data, highlighting rising borrowing costs and economic uncertainty.

Veritas Investment Research analyst Nigel D’Souza noted that real estate developers are facing liquidity pressures as many consumers are not able to close purchases that have been presold due in part to higher mortgage rates.

“That is creating liquidity issues across the real estate developer space. And you’re seeing either some developers facing bankruptcy or facing financing shortfalls. Those pressures will continue to build,” he said.

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Christopher Luxon sworn in as New Zealand prime minister, says priority is to improve economy - Halifax.CityNews.ca

WELLINGTON, New Zealand (AP) — Christopher Luxon was sworn in as New Zealand’s prime minister on Monday and said his top priority was to improve the economy.

The 53-year-old former businessman leads a conservative coalition after his National Party struck a deal Friday with two smaller parties following a general election last month.

After the swearing-in ceremony, which was presided over by Governor-General Cindy Kiro, Luxon told reporters the job was an “awesome responsibility.”

He said he would hold his first Cabinet meeting Tuesday and look to quickly finalize a 100-day plan. He said he also planned a visit to Australia before Christmas Day.

Luxon said he needed to get a Treasury briefing on the state of the government’s finances.

“We are concerned and worried that it’s been a deteriorating picture for a number of months now,” Luxon said.

Under the coalition agreement, Luxon has promised to deliver tax cuts and train 500 more police officers within two years.

He has also promised less government bureaucracy, including a 6.5% cut to the public service.

Luxon said it would be up to ministry chief executives to figure out how to make the cuts, whether by stopping programs, not filling vacancies or laying off some workers.

The new government also plans to repeal tobacco restrictions approved last year by the previous government, including requirements for low nicotine levels in cigarettes, fewer retailers and a lifetime ban for youth.

Luxon said his government disagreed with parts of the policy, including concentrating distribution. He said smoking rates had been coming down for 30 years.

“We will continue to make sure we have good education programs and encourage people to take up vapes as a cessation tool,” Luxon said.

But critics said the plan was a setback for public health and a win for the tobacco industry.

Chris Hipkins, who officially resigned as the nation’s 41st prime minister early Monday, said he wished Luxon and his coalition partners well. He said the country had been through tough times but the economy was turning a corner.

Hipkins, who held the top job for 10 months after Jacinda Ardern unexpectedly resigned in January, plans to remain in Parliament as opposition leader.

___

Follow AP’s Asia-Pacific coverage at https://apnews.com/hub/asia-pacific

Nick Perry, The Associated Press

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Here's why the U.S. stock market and economy don't need or even miss China - CNBC

Federal Reserve Chairman Jerome Powell, wearing a face mask, testifies before the House of Representatives Financial Services Committee during a hearing on oversight of the Treasury Department and Federal Reserve response to the outbreak of the coronavirus disease (COVID-19), on Capitol Hill in Washington, U.S., June 30, 2020.

Tasos Katopodis | Reuters

Two years ago, the Omicron scourge hit the U.S. hard. The Federal Reserve had been keeping interest rates ultra-low, but it wanted to begin a monetary tightening cycle. Fed Chairman Jerome Powell, though, couldn't be sure how badly the Covid variant would slow the economy because he had no idea how viral the new strain would be. Would it shut down the economy again? Would it be more restrictive, causing the country to revert to the closing of all stores except those designated with emergency status, something that was simply wiping out all shops with stretched balance sheets? Who knew? The thing moved so fast that the last thing Powell could do was raise rates.

Yet, the Fed chief was roundly criticized for avoiding tightening because the economy wouldn't slow down; nor would inflation. He waited four months to be sure before taking rates in March 2020 up to a range 0.25% to 0.50%, a shrewd decision, in retrospect, because at that point Omicron had played out and the crippling impact had run its course.  The U.S. ended its tough restrictions on Covid in the spring of 2022, right about the time the Fed began the most aggressive tightening cycle in its history. (Including the March hike, central bankers increased the fed funds overnight bank lending rate 10 more times to the current range of 5.25% to 5.50%.) U.S. gross domestic product (GDP) grew 2.1% in 2022, a decent rate all considering.

Now consider China. The country adopted a strict Covid policy that prevailed through 2022 causing its GDP to fall to 3% way below the Chinese government's 5.5% target.

In retrospect, that was the beginning of phase two of the slowdown in China, phase one being when then-U.S. President Donald Trump began, and phase two when current President Joe Biden continued, if not accelerated, the economic separation between our two countries. We didn't know it at the time but it wasn't Trump's tariffs as much as his admonitions that it was time to break with cooperation because it had been one-sided. Our continual building of factories and expansion together had failed to make for a level playing field. China could not be counted on as a reliable trading partner. There were really three reasons: (1) the Chinese no longer attempted to change their rapacious ways with American industry; (2) their foreign policy plans were unwavering in their insistence of domination of the lesser developed world via the Belt and Road Initiative; and (3) three their military, always the power behind the throne, decided to go toe-to-toe with the United States by appropriating the most sophisticated semiconductor chips while beginning a policy of intimidation of Taiwan in order to force Taiwan Semiconductor Manufacturing Company, the largest chip foundry, or factory, in the world, to favor the makers of Chinese chips. Given that we had pretty much ceded the making of our best chips to TSMC, the threat was real and nefarious, meant to drive home plans for a one-country strategy, a strategy never abandoned by China and one that had been sub rosa accepted unchallenged until August 2022 when then-House Speaker Nancy Pelosi (D-Calif.) visited the country.

That break proved crucial to the geopolitical strategies of both countries. It signaled that not only was it no longer business as usual but that our nation was going to cease tolerating any designs on Taiwan even as China was unwilling to acknowledge that our policy had changed when Pelosi visited. The one country status that we had tacitly accepted ended – and with it any hope of economic connection with China save Nike and Club names Apple (AAPL) and Starbucks (SBUX), plus existing plants by some multinationals.

New plants seemed and became out of the question, something in retrospect probably seemed unlikely when Biden replaced Trump. The hardline had gotten harder and with it new jobs coming from the U.S.

In retrospect that was crucial to what has become of the two nations, at least as measured by the two stock markets. The S&P 500 advanced 14% over the next two years, but China's market sank nearly 1.5% during the same period. The decline, as minor as it seemed, masked the tremendous rot underneath, as youth unemployment exploded to more than 20% before it ceased to be reported, and the cracks in the Chinese property market became evident and then accelerated to the point where we expect things to grow only worse. Meanwhile, Chinese President Xi Jinping acted as if nothing had weakened and only strengthened his hold on lifetime power.

U.S. President Joe Biden and Chinese President Xi Jinping agreed to resume high-level military communication when they met in person Wednesday for the first time in a year in San Francisco on the sidelines of the Asia-Pacific Economic Cooperation conference.

Brendan Smialowski | Afp | Getty Images

Now, cut to the most recent events, and we seem almost unaware of the significance of Xi visiting San Francisco. The trip seemed far more important to Xi than to us. In fact, we could ask what the heck was he doing here. Was it really about trying to restore more normal relations or was it about bringing American companies back to China and a hoped-for lessening of restrictions on Club holding Nvidia (NVDA), which makes the powerful chips most needed if China is going to be sure to control the thought processes of its industry and its people while bolstering its military. If those were the desires, it was apparently an abject failure on his end but one he can't afford to accept if he is going to restart his economy. No other country is as strong as the U.S. or has the possibility of providing the kind of employment away from property, which we know is a total disaster even as we seem to think that a command economy can't have such a disaster.

Now we find a China that needs us so badly that its president's hat and hand gesture must be followed up on with more enticement. Staying away from the U.S. seems out of the question. Unless Xi adopts Keynesian economics which he seems to rule out at every turn.

The impact on our country is stunningly missing. Have you noticed its lack of import? It's so obvious that we don't need China. We don't want their imports; witness our blocking of their cheap electric cars. We want to wean ourselves off their supply chain as it turned out to be a lot more fragile than we thought. It's taking longer and many are recalcitrant as reshoring costs a fortune. We seem to want to ignore the low cost of doing more business in Mexico. It seems as if it might run afoul of a policy set by Trump. Did you notice how the U.S. auto companies were hesitant to suggest that they might move manufacturing to China? They were toothless in the face of the striking United Auto Workers (UAW) that seemed to know that the so-called nuclear option wouldn't be used. The cowering auto execs lost it all to end the six-week UAW walkout – and yes, it does seem like it all, because they were boxed into the U.S., into the union portion of the U.S. even more so.

What does it all mean to our country? I think it means that our soft landing is, in retrospect, more remarkable because China hasn't helped one bit with commerce that at one point when Trump was president, seemed most needed. We have caught and passed the Chinese and seemed to leave them well behind us DESPITE the most aggressive Fed tightening cycle in our nation's history. The gulf is not metaphorical. We ARE NOT going to help the Chinese. They don't seem to know how to, or can't, help us.

I think the testament of our growth is ignored by those who can't believe that Powell has the gumption to slow inflation far more than slow the economy. We handled Covid better than China. It didn't help the Chinese cause that they refused the Pfizer vaccine. We handled the declines in our oil and natural gas and industrial and financial troubles better, in part because of our gigantic stimulus. Yes, our budget deficit is huge and should be crushing our stock market. But the two don't seem to relate. Maybe something will be done about it, maybe something won't. It just all seems so much more manageable than whatever the hell is going on in China.

But as we close out this 2023 year with a stock market that has such a hard time quitting, we should be thankful that our nation came out of Covid stronger than it came in, while China came out much weaker without a plan to get stronger and without any chance of gaining largesse from the American government and American industry; the latter of which doesn't seem to be suffering from the Chinese downturn. That included, of all companies, Apple, which took whatever share was to be gained from the once toothful colossal that now seems toothless despite our own inferiority complex otherwise.

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Here's why the U.S. stock market and economy don't need or even miss China - CNBC
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Indigenous economy surging toward $100B, Indigenous leaders say - CBC.ca

Entrepreneur Rob Tebb can see his company becoming bigger — a lot bigger.

"The opportunity is there to just grow this business to four or five times the size that it is," he said.

Tebb, who is Métis, owns Regina-based Xtended Hydraulics & Machine with his wife, Katherine. More than half their staff of 26 is Indigenous.

The high-tech company makes specialized parts, mostly for mining companies, and has just broken into a new market: the defence industry. It's a moment the Tebbs have been working toward for years.

Like many Indigenous business leaders, Tebb said he feels a wave of economic development and business opportunity is rolling across the country.

This week, that wave officially surged into Toronto at a conference called Indigenomics on Bay Street, which brought together a mix of government, corporate and Indigenous leaders.

All were focused on growing the Indigenous economy in Canada to $100 billion a year and marking the paths to make the goal a reality.

Carol Anne Hilton, the event's organizer and founder of the Indigenomics Institute, said putting Bay Street into the conference name is an "invitation for corporate Canada to respond" and to learn "about the strategic advantage of working with Indigenous people."

WATCH | This Indigenous-owned business sees 'huge' opportunity ahead:

This Indigenous-owned business sees 'huge' opportunity ahead

2 days ago

Duration 1:25

Featured VideoRob Tebb, co-owner of Regina-based Xtended Hydraulics & Machine, says about half his current team members are Indigenous — and he sees more opportunities for growth and training ahead.

What is 'Indigenomics'?

"Indigenomics" is "economics from an Indigenous worldview," Hilton said, adding that she invented the word before writing a book on the subject.

It's about taking a "constructive, generative" approach to economic growth for Indigenous  communities, she said, in order to establish "the systemic inclusion of Indigenous Peoples in today's modern economy."

Hilton, a member of Hesquiaht First Nation in British Columbia, said she believes it's an antidote to the historical injustice of their exclusion from the economy through discrimination, laws like the Indian Act and Canada's system of reserves.

Indigenomics on Bay Street is the ninth Indigenous business event she's organized since 2019, but it's her first in the country's financial capital.

The $100-billion question

The Indigenous contribution to Canada's economy is on an upward trend, with the latest data putting the value at almost $50 billion in 2020. 

So where does the $100 billion goal come from?  

First, Hilton said, it's based on Canada's gross domestic product — which according to Statistics Canada was about $1.98 trillion in 2021 — and the fact that Indigenous people make up five per cent of the population.

Hilton is among Indigenous business leaders who say the Indigenous economy in Canada is on the way to reaching $100 billion a year, double its value in 2020. (Evan Mitsui/CBC)

"If we look at Indigenous Peoples as being generative of five per cent of Canada's economic activity, that is looking directly at $100 billion," she said.

But the number is also aspirational to provide Indigenous people with a "marker," Hilton said, because "we need something to kind of propel us out of the status quo."

So how quickly can the Indigenous economy grow from its current $50 billion to $100 billion?

Hilton and others believe the goal will be met within a few years.

At the conference in Toronto, panel discussions were organized around opportunities and strategies to drive economic growth, generate wealth and supply jobs.

Sessions on major infrastructure builds, clean energy projects, raising capital and procurement policies to support Indigenous suppliers were some of the key topics.

The power of procurement policies 

In recent years, governments and companies have enacted supplier diversity policies, using their purchasing power as a tool for equity by creating business opportunities for minority groups to sell them goods and services.

The federal government requires all departments and agencies to "ensure a minimum of 5% of the total value of contracts are held by Indigenous businesses."

Tabatha Bull, CEO of the Canadian Council for Aboriginal Business (CCAB), said she believes procurement is a key part of hitting the $100-billion target. She led a procurement panel at the conference.

"If you think about the government, who spends around $20 billion annually, a five per cent commitment is a significant injection into the Indigenous economy," Bull told CBC News.

Tabatha Bull, CEO of the Canadian Council for Aboriginal Business, says procurement policies that ensure Indigenous businesses receive a certain value of contracts are a key part of reaching the $100-billion target. (Evan Mitsui/CBC)

Since 2018, the CCAB has run a program called Supply Change to help companies and organizations connect with Indigenous suppliers — and almost 150 companies have signed on.

Indigenous young people are a fast-growing demographic, Bull said, and First Nations entrepreneurs launch startups "at nine times the rate of non-Indigenous businesses."

Bull, a member of Ontario's Nipissing First Nation, said procurement policies that support Indigenous entrepreneurs help the broader economy.

Back in Regina, Rob Tebb said some companies' Indigenous procurement policies don't actually work as intended, but those developed in collaboration with Indigenous communities can make a big difference.

The CCAB introduced Tebb's manufacturing business to its first defence industry client. Thanks to that defence company's Indigenous procurement program, Tebb is making parts for a military vehicle.

He said he's optimistic that more military jobs will come. "Once you get work from one defence company, now all the other ones see you as a qualified vendor," he said.

Learning from First Nations in the U.S. 

Bill Lomax, CEO of the First Nations Bank of Canada (FNBC), was another speaker at the conference in Toronto.

Lomax, who took the bank's top job this past spring, has more than 20 years' experience in U.S. banking and finance, an MBA and a law degree.

A member of the Gitxsan Nation in northwestern B.C., Lomax is among those who believes the Indigenous economy in Canada will reach $100 billion soon.

"It wouldn't take that long for us to double or triple," he said.

First Nations Bank of Canada CEO Bill Lomax is shown delivering his keynote address at the Indigenomics on Bay Street event in Toronto. He focused on lessons that First Nations in Canada can take from the success of some Indigenous communities in the U.S. (Evan Mitsui/CBC)

In the United States, Lomax said, there are 30 to 40 First Nations with multibillion-dollar economies — and many others with economies that tally in the hundreds of millions of dollars. Over eight years with Goldman Sachs, he worked with American tribal nations managing a portfolio worth more than $2 billion.

His conference keynote address focused on a few lessons that First Nations in Canada can take from the success of some Indigenous communities south of the border.

Like the CCAB's Bull, Lomax said he also believes procurement policies are an important driver of economic growth, but he said Indigenous communities in Canada should lean on the federal government to expand its spending to be on par with Indigenous procurement in the U.S.

Lomax also recommended that First Nations work to get into the gaming industry. In the U.S., gaming brought $41 billion to Indigenous communities last year, while casinos in Las Vegas took in only $8.3 billion, he said.

First Nations in Canada should also focus on the cannabis industry, he said, adding that increasing participation in natural resources projects, as well as the development of real estate and businesses on urban reserves, will drive growth.

The FNBC has expansion plans to support more communities and manage investments, and Lomax said he's confident that "we're going to see a lot of First Nations become economic powerhouses."

The rising tide

André Le Dressay, director of the Tulo Centre of Indigenous Economics at Thompson Rivers University in Kamloops, B.C., has worked with Indigenous communities and institutions on economic development for 30 years.

He told CBC News that "the potential of the Indigenous economy has certainly been undervalued" and that it's "to the shame of Canada" that Indigenous people haven't been engaged as full partners in the economy.

Tebb, co-owner of Xtended Hydraulics & Machine in Regina, said he can see this changing, and he imagines doubling his staff to fill new orders at his shop.

Rob Tebb is co-owner of Xtended Hydraulics & Machine in Regina. The high-tech company makes specialized parts, mostly for mining companies, and has just broken into the defence industry. (Mitchell Steffensen/Xtended Hydraulics & Machine)

"When I look back at the past, I see indigenous people left out of the economic fabric of our country, and now I see excitement and opportunities that I've never seen before," he said.

"You can see it in the communities. There's hope for a future."

Carol Anne Hilton agrees. "I feel very much that this is a powerful time to be alive," she said, "where Indigenous people are picking up business as a tool and using it as a stake in the ground to say we're still here."

A rising economic tide in Indigenous communities, she said, is good for the economy as a whole.

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Indigenous economy surging toward $100B, Indigenous leaders say - CBC.ca
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