Global Markets: Canada’s economy off to slow start

Expectations of 0.7 per cent growth in first quarter

By MarketsFarm

WINNIPEG, Jan. 19 (MarketsFarm) – The following is a glance at the news moving markets in Canada and globally.

– A Reuters poll of more than 40 economists expects Canada’s economy to remain mostly stagnant for the first quarter of 2021 before returning to “pre-COVID” levels sometime later in the 2021 fiscal year. Economists in the poll, conducted from Jan. 11 to 18, expects the country’s economy to grow only 0.7 per cent in the first quarter due to the virus’ second wave and another set of pandemic restrictions. However, some economists would not be surprised to see a slight downturn. “While the eventual ramp up in vaccine distribution offers hope of a strong economic rebound in the second half of the year, the economy is entering 2021 on a wobbly footing and could suffer a modest contraction in the first quarter,” Ksenia Bushmeneva of TD told Reuters. However, most economists polled stated that increased vaccine distribution in the coming months will help provide a boost to Canada’s GDP. The nationwide unemployment rate, which was at 8.6% last month, is projected to go down to 7.0 per cent at the end of 2021.

– Meanwhile in China, analysts polled by Reuters expect the country’s GDP to have grown by 6.1 per cent over the final quarter of 2020, an increase from the 4.9 per cent growth China experienced in the third quarter. The nation’s GDP would increase by 2.1 per cent compared to the end of 2019, becoming the only major economy to expand in 2020. Increased demand for Chinese goods, as well as the purchase of record amounts of crude oil, copper, iron ore and coal, helped stimulate economic growth.

– In his last full day in office, U.S. President Donald Trump may exercise his power to issue around 100 pardons and commutations today, according to CNN. Those pardoned are mostly expected to be those either loyal to Trump and/or the Republican Party. Despite legal questions whether he can do so, Trump is not expected to pardon himself.

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