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UK economy grew by 6.6% in July as Covid-19 recovery continues — business live | Business






Economy 11.7% smaller than February back at 2013 levels





Full story: Covid-19 recovery continues





Experts warn UK economy faces tough times





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Sunak: Welcome figures, but worries ahead

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Services, manufacturing, construction and agriculture all grew





Economy shrank 7.6% in last quarter

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UK GDP REPORT FOR JULY

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A COVID-quiet summer will cost Montreal’s economy hundreds of millions


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Industry figures for 2009, the last year that the Grand Prix didn’t take place, show Montreal hotels suffered a $25-million revenue shortfall compared with other race weekends, Paré said.

Occupancy rates in Montreal typically average 96 or 97 per cent during Grand Prix weekend. City hotels double their room rates to coincide with the event, allowing them to offset slower winter bookings.

“If you convert that $25 million into 2020 dollars, and if you consider that additional seats have since been installed at the racetrack, the shortfall this year is going to be even higher,” Paré said.

As more events in and around Montreal get cancelled, those lost weekends — and weeks — look set to multiply well into the summer. On Tuesday, event promoter Evenko officially cancelled this year’s edition of the Osheaga and ÎleSoniq electronic music festivals. Both events will be back in 2021, Evenko said.



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UN’s Development GoalsThreatened by a World Economy Facing Recession — Global Issues


As famines of “biblical proportions” loom, Security Council urged to “act fast”. Credit: United Nations
  • by Thalif Deen (united nations)
  • Thursday, April 23, 2020
  • Inter Press Service

Aimed at addressing some of the global challenges the world faces– including extreme poverty and hunger, inequalities in incomes and gender, climate change and environmental degradation– the SDGs now seem threatened by a world economy facing a brutal recession.

With a 2030 deadline,the SDGs are in near disarray, as the coronavirus pandemic has decimatedthe economies of both rich and poor countries—even as warning signs reflect a possibly massiverise in poverty and hunger worldwide.

The slump in the global economy has triggered a recession in several donor nations, including Japan, the US, UK, France, Germany and China, among others.

In its most recent report released April 14, the International Monetary Fund (IMF) warned that the world is facing its worst downturn since the Great Depression of the 1930s, and the global economy would contract by 3.0 percent in 2020.

This was a significant reversal from early this year when the IMF predicted the world economy would outpace 2019 and grow by 3.3 percent in 2020.

Ambassador Mona Juul of Norway, President of the UN’s Economic and Social Council (ECOSOC), told delegates April 23 that COVID-19 shows “it is more important than ever to focus on the implementation of the SDGs.” Therefore, issues such as resource mobilization, illicit finance, debt and women’s empowerment must be priorities,” she said.

Still, at the United Nations, several lingering questions remain: What are the new obstacles facing the implementation of SDGs? Will they survive an uncertain future?

Will donor nations help rescue the development agenda? Andwill the General Assembly be forced to push back the 2030 deadline?

Tariq Ahmad, Oxfam America’s Senior Policy & Research Advisor told IPS: “We are seeing COVID-19 wreak havoc on the global economy, which is felt acutely in the homes and communities of the most vulnerable among us”.

The economy downturn, he said, paints a dismal picture of what resources will be available to finance the SDGs. This crisis could push half a billion more people into poverty unless urgent and drastic action is taken.

A recent Oxfam brief has called for an Economic Rescue Plan For All, suggesting how the world could help finance UN’s estimated needs while the UN Conference on Trade and Development (UNCTAD) has called on governments to mobilize at least $2.5 trillion dollars to support developing economics in order to tackle the pandemic and prevent a global economic collapse.

And a new study by the UN University’s World Institute for Development Economics Research (UNU-WIDER) predicts that the COVID-19 pandemic could increase global poverty by as much as half a billion people, or 8% of the total human population. This would be the first time that poverty has increased globally in thirty years, since 1990.

In its annual Global Report on Food Crises, an international alliance of UN, governmental and non-governmental agencies, said, at the end of 2019, 135 million people across 55 countries and territories experienced acute food insecurity.

But the coronavirus pandemic is expected to make the situation worse and negatively impact on hunger and food insecurity, specifically in the developing world.

Jens Martens, executive director of Global Policy Forum, (a civil society think tank based in New York and Bonn), told IPS the COVID-19 pandemic not only has serious consequences for the health situation in many countries of the world but it will also have a massive impact on the implementation of almost all SDGs.

“The looming global recession will dramatically increase unemployment, poverty and hunger worldwide,” he said.

The situation, he pointed out, is even more serious because the macroeconomic situation in many countries of the global South had already deteriorated before the outbreak of the virus.

A vicious circle of debt and austerity policies have threatened socio-economic development from Argentina to Lebanon, he warned.

“The food situation had also deteriorated in many countries, even before COVID-19, for example, due to the locust plague in East Africa”.

Without effective multilateral counter-measures, Martens argued, inequality between rich and poor countries will increase considerably.

“COVID-19 is thus also a global wake-up call for international cooperation and solidarity”, he declared.

In a report released April 20, the World Food Programme (WFP) said the COVID-19 pandemic could almost double the number of people suffering acute hunger, pushing it to more than a quarter of a billion by the end of 2020.

The number of people facing acute food insecurity stands to rise to 265 million in 2020, up by 130 million from the 135 million in 2019, as a result of the economic impact of COVID-19, according to a WFP projection.

Ahmad said one of the ways to free up vital resources to tackle the issues of hunger and poverty would be to cancel the debt of developing nations.

For example, Oxfam also jointly warned of the risk in West Africa, of 50 million people threatened by hunger and malnutrition in the coming months.

Meanwhile, Ghana is spending 11 times more on servicing its debts than it is on health. The costs of the debt burden are paid by the poorest people, in cuts to government services, while women are the hardest hit.

Aid is a critical ingredient to help finance the response. Of the estimated 2.5 trillion USD need, the UN estimates a need of 500 billion in new official development assistance (ODA).

In a soon to be released report, Oxfam estimated almost 300 billion of this should be provided by traditional northern donors. And there are still some fundamental flaws in the current system that prevent aid from supporting local responders on the front line of care.

“This crisis is the time for bold and visionary choices for our collective future. It’s time for donors to profoundly transform their aid to build a world that is free from poverty, that is more equal, feminist and sustainable. COVID-19 could set back the fight against poverty by decades – we must now act and build a better future,” he declared.

Asked if the 193-member UN General Assembly should postpone the 2030 deadline to achieved SDG targets, Martens said postponing the deadline for achieving the SDGs because of COVID-19 would send out completely the wrong signal.

On the contrary, he said, the coronavirus crisis shows how important these multilateral goals are, and how fatal it was that governments have not taken their implementation seriously enough since 2015.

Key SDG targets like the development of social protection systems, universal health care and a functioning public infrastructure must be given top priority. Only in this way can the current crisis be overcome and future crises prevented. This also requires effective policies of global solidarity, said Martens.

“What we need now is a Solidarity Summit under the auspices of the United Nations to deal with the social and economic consequences of the COVID-19 pandemic in an integrated manner”, he declared.

Asked about the postponement, Ahmad said “pushing back the SDG deadline won’t help pull anyone who is facing poverty or hunger – instead we need to see sweeping action across the globe to help offset some of this crisis’ worst impacts on the world’s most vulnerable”.

The challenge here is not time, it’s political will, he noted.

“This is an unprecedented daunting global challenge, but we must meet it both with urgent action that saves lives now and interventions that create a more fair system going forward, like the cancellation of debt for developing nations, and other support to help families stay healthy and safe until they are able to earn a living again.”

Even before COVID-19, he said, “we were dangerously behind on meeting many of the SDGs, but if this moment has taught us anything, it’s that we are able to make massive shifts in how we all live and cooperate to tackle a joint challenge – we must see the same approach taken to meet the Sustainable Development Goals.”

The writer can be contacted at [email protected]

© Inter Press Service (2020) — All Rights ReservedOriginal source: Inter Press Service

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Read the latest news stories:

  • UN’s Development GoalsThreatened by a World Economy Facing Recession Thursday, April 23, 2020
  • Collaboration Can Help Eradicate COVID-19 Thursday, April 23, 2020
  • Citizen Action is Central to the Global Response to COVID-19 Wednesday, April 22, 2020
  • What Does Covid-19 Crisis Mean for Rural Development? Wednesday, April 22, 2020
  • Q&A: Continued Social Distancing and Hundreds of Millions More in Poverty – A New Normal for the World? Wednesday, April 22, 2020
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Pence says reopening economy safely critical to ensure ‘cure isn’t worse than the disease’


WASHINGTON — Vice President Mike Pence said Sunday that the Trump administration wants to be sure that the coronavirus “cure isn’t worse than the disease” as the White House takes steps to “put America back to work as soon as we responsibly can.”

Pence pointed to the White House’s recently-announced “Opening Up America Again” plan, which lays out suggested guidelines for states to follow as they move toward relaxing the social restrictions that have been aimed at slowing the spread of a virus that has already infected at least 728,000 Americans and is responsible for more than 38,000 deaths in the U.S., according to NBC News analysis.

He said that America is seeing “encouraging signs” that those restrictions are “slowing the spread” of the virus in major hot spots, and that the “full partnership with governors around the country” to eventually “put the coronavirus in the past.”

“No one wants to reopen America more than President Donald Trump, and I think the American people have known that from weeks ago when the president declared that important balance: We have to make sure the cure isn’t worse than the disease,” he said.

“The reality is that for all the sacrifices the American people have made, sacrifices that have literally saved lives, the truth is: There are real costs, including the health and wellbeing of the American people, to continue to go through the shutdown that we are in today.”

The White House’s reopening pathway includes three phases of relaxing restrictions that states can move to once certain conditions are met for testing, hospital capacity and a decrease in COVID-19 related symptoms and cases.

One day after that announcement, which notes the guidelines are “implementable on [a] statewide or county-by-county basis at [the] governors’ discretion,” the president tweeted a series of messages calling to “liberate” three states where Democratic governors have faced some protests for implementing social-distancing guidelines similar to those the administration suggested last month.

Pence’s comments about the president’s concern about the “cure” not being “worse than the disease” came in response to a question about those tweets from Trump.

A new NBC News / Wall Street Journal poll conducted just before the announcement of that new pathway shows that 58 percent of registered voters are more concerned that America will “move too quickly in loosening restrictions” and cost more lives than they are about the country taking too long to loosen the restrictions and cost more American jobs thanks to that delay.

One key portion of the guidelines’ “gating criteria,” which tells states only to move forward to the first phase of reopening, is a strong testing system that can keep tabs on the virus’ spread. Pence announced Sunday that the White House believes that there are enough tests available for any state to move into that first phase, although states would have to meet other portions of the “gating criteria” in tandem with testing capacity.

“Testing has been a focus of ours, as well, from the very beginning. It’s the reason why the president, early on, brought in the vast array of commercial labs that took us from 80,000 tests one month ago to now 4 million tests as of yesterday,” he said.

“There is a sufficient capacity of testing across the country today for any state in America to go to a Phase 1 level, which contemplates testing people that have symptoms of coronavirus, and also doing the kind of monitoring of vulnerable populations in our cities, in our nursing homes, that we ought to be watching very carefully for outbreaks.”

Pence added that while America can test about 150,000 people per day, daily testing capacity would double “overnight” if states would activate all labs in the state that can handle tests.

But governors from both parties have balked at the suggestion that the problems with testing capacity stop with them.

Asked whether their states have the testing capacity that they need to move toward reopening, Ohio Republican Gov. Mike DeWine and Michigan Democratic Gov. Gretchen Whitmer both said that shortages of vital supplies needed for test kits are frustrating their efforts to ramp up testing.

DeWine made a plea to the Food and Drug Administration to “prioritize” companies that use a different method to create the “reagent” solution needed in test kits, given shortages of certain vital materials. He argued that “I could probably double or triple Ohio virtually overnight” if that new method was approved.

And Whitmer called on the federal government to use its power to compel American business to ramp up production to augment those shortages.

Asked about the protests against social-distancing guidelines in Michigan, Whitmer said that she doesn’t regret enacting those restrictions because Michigan is facing a “disproportionate problem”compared to other states.

“These stay-home orders weigh incredibly heavy because I know there’s an economic cost. I know there’s a mental health cost, people are struggling with this isolation that we have, on top of all the other stressors,” she said.

“But the fact of the matter is: We have to be really smart about how we proceed.”





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GOLDSTEIN: Trudeau must choose between climate pledge and Alberta’s economy


The dilemma for Prime Minister Justin Trudeau on climate change and energy policy comes down to this.

If he wants to meet the promises he’s made about reducing Canada’s industrial greenhouse gas emissions, he has to gut our oil and gas sector.

He also has to do it quickly and the consequences for Alberta’s economy, as well as Saskatchewan’s and Canada’s, will be severe.

Trudeau and his cabinet would have to reject the $20.6 billion Teck Frontier oilsands megaproject in Alberta, now up for approval after getting the go-ahead from federal regulators.

But even if the Liberals cancel that project, that wouldn’t reduce current emissions, just slow the increase of future ones.

To meet his 2030 target of cutting Canada’s current emissions to 30% below 2005 levels, Trudeau will have to eliminate the equivalent of 50 Teck oilsands megaprojects over the next decade, or five Teck megaprojects every year, for 10 years.

Even using the Trudeau government’s own projections of what emission levels will be in 2030, including projects it hasn’t started, it would still have to cut current emissions by the equivalent of 19 Teck-like megaprojects over 10 years, or almost two every year, for a decade.

To achieve his election promise of cutting Canada’s emissions to net zero by 2050, Trudeau would have to cut Canada’s emissions by the equivalent of 175 Teck-like megaprojects over the next 30 years — almost six Teck-like megaprojects annually, for three decades.

Canada has seven economic sectors that generate significant industrial emissions, but oil and gas has been the fastest-growing since 1990 and the largest since 2012.

Today, these emissions total 195 megatonnes annually, an 84% increase since 1990.

The second-largest is the transportation sector at 174 megatonnes of emissions annually, a 43% rise since 1990, but with stable emissions since 2012.

Emissions in the electricity, heavy industry and waste sectors have gone down since 1990, while emissions in the agriculture and building sectors haven’t grown significantly since 2005.

Technology in the oil and gas sector is constantly improving, reducing the carbon intensity of its emissions, meaning the energy required to produce a barrel of oil generates fewer emissions over time, but not enough to come close to meeting Trudeau’s 2030 and 2050 targets.

For that, Trudeau will have to slash current oil and gas production.

Trudeau’s dilemma is that while he has never acknowledged the severe economic consequences to the Alberta, Saskatchewan and Canadian economies of fulfilling his climate change promises, he also doesn’t have enough money — our money — to subsidize an industry his climate policies are designed to kill.

Last week we learned the price tag on completing the Trans Mountain pipeline the Trudeau government bought two years ago has increased to $12.6 billion, 70% higher than its original forecast.

A report by Reuters news said Trudeau and his cabinet are considering federal aid to Alberta if they decide to reject the Teck megaproject, with the Liberals divided on what to do when they announce their decision later this month.

Vetoing Teck would be widely seen in Alberta as a deliberate, possibly fatal blow to the province’s beleaguered economy by a vindictive Liberal government that no longer has a single seat there or in Saskatchewan.

Approving it would be viewed as a betrayal by those who supported the Liberals in last year’s election because of Trudeau’s promise to meaningfully address climate change.

Now, Trudeau has to pick a lane.

[email protected]



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Cow Dung Holds the Key to Nepal’s Green Economy — Global Issues


A company in Pokhara has enlarged household digesters into an industrial scale plant that uses climate-friendly technology that could ultimately be scaled nationwide to reduce Nepal’s balance of trade gap.
  • by Kunda Dixit (kaski, nepal)
  • Friday, January 17, 2020
  • Inter Press Service

Over the past 30 years, Nepal has become a world leader in spreading locally-designed household biogas digesters. There are now 300,000 of them, helping reduce deforestation, improving people’s health and lifting women out of drudgery and poverty.

Now, a company in Pokhara has enlarged household digesters into an industrial scale plant that uses climate-friendly technology that could ultimately be scaled nationwide to reduce Nepal’s balance of trade gap.

Kushal Gurung’s grandfather was in the British Army, and he also applied for recruitment but failed the eyesight test. So, he set up Gandaki Urja in Pokhara that works with wind, solar and hydropower, but he believes Nepal’s best option for sustainable growth lies in energy from waste.

“Nepal must abandon fossil fuels, but even among renewable energy sources biogas has a three-fold advantage. It reduces greenhouse gas emissions, and is therefore climate friendly. It allows us to manage raw waste. And it can slash our import bill for LPG and chemical fertiliser,” says Gurung. “It is a win-win-win.”

A tipper truck has just arrived from Gorkha at Gandaki Urja’s biogas plant at Kotre near Pokhara, which with its dome digester looks like a nuclear reactor. The truck tilts its container to empty 5 tons of smelly poultry waste into a pit where rotting vegetables and cow dung from a farm in Syangja are all being mixed before being fed into the 4,000 cubic meter digester that is kept inflated.

In the absence of oxygen, bacteria already in the cow dung go to work to break down the waste into methane, carbon dioxide and hydrogen sulphide. The impurities are removed by filters to produce 200 cylinders of bio-CNG a day which are sold to big hotels and restaurants in Pokhara.

Customers pay a deposit for the cylinders and pressure regulators, and usually use up about two cylinders a day. The cost per kg for the bio-Compressed Natural Gas (bio-CNG) is the same as the state subsidised Liquified Petroleum Gas (LPG). However, customers prefer the biogas because it saves them up to 30% cost because it has higher calorific value than LPG, and there is no residue that goes waste.

“So far, the customers are satisfied, and we see demand growing in the future as word spreads,” says Ashim Kayastha, Director of Gandaki Urja.

Half the plant’s revenue comes from bio-CNG and the other half from the effluent which is dried and sold as organic fertiliser. The plant can produce up to 11,000 tons of fertiliser a year and is sold to surrounding farms.

The future of bio-CNG depends on scaling up the technology since any municipality generating more than 40 tons of biodegradable waste per day could have its own biogas plant. Nepal imports 500,000 tons of chemical fertiliser a year, and if each of 100 municipalities produced 5,000 tons of organic fertiliser Nepal could slash its import bill.

This could also significantly reduce the country’s annual import of Rs33 billion worth of LPG from India which grew four-fold in the past 10 years, making up 2.5% of Nepal’s total import bill. But to scale up, industrial biogas needs the same government incentives as hydro, solar and wind power.

At the moment hydropower investors enjoy a 100% corporate tax holiday for 10 years, and 50% for the next five years. There is only 1% tax on imports of equipment for solar, wind and hydropower, there is no such provision for the equipment for industrial scale biogas. Instead, there is a tax on interest, and also VAT on bio-CNG.

 

 

“The government should look at this not only as an energy project, but at its multifaceted benefits,” says Kushal Gurung of Gandaki Urja. “There is a waste-to-energy and fertiliser angle, too. If we want to make Nepal fully organic in the next ten years, projects like these need to be prioritised.”

Gandaki Urja got a boost from an unlikely source, Business Oxygen (BO2) in Kathmandu which helps entrepreneurs running Small and Medium Enterprises (SMEs) to scale up by injecting equity and providing technical assistance.

Says Siddhant Pandey of BO2: “We are always on the lookout for climate investments, and we realised that bio-CNG would be an incredible adaptive resilience investment. It would displace imports of LPG and fertiliser. It was going to be clean, no carbon footprint, and it made business sense because it met our internal return on investment expectation.”

The challenges are ensuring reliable sources of raw material and building knowhow for the technology within Nepal.

Says Pandey: “The Pokhara plant is a drop in the ocean, it can abe replicated in all 7 provinces. We know it is scalable, and it depends how proactive provincial governments will be.”

 

This story was originally published by The Nepali Times

© Inter Press Service (2020) — All Rights ReservedOriginal source: Inter Press Service

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UK economy at its lowest point since 2009



The British economy had its worst quarter since 2009, the Office for National Statistics (ONS) reported on Tuesday.

The economy flatlined month-on-month in October, after two months of decline.

Services expanded by 0.2% from August-to-October, offsetting a 0.7% contraction in manufacturing and 0.3% in construction.

Reflecting a drop in manufacturing exports, Britain’s goods trade deficit widened to £14.5bn in October, up from £11.5bn in September.

The pound shrugged off the low growth, gaining both against the dollar and the Euro. The pound broke over €1.19 on Monday, for the first time since May 2017. The rally seems to respond to polling, which suggests the Conservatives have a strong lead, betting on an orderly exit which removes the risk of a cliff-edge exit.



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Plane passengers say ‘enough is enough’ after horse spotted in economy


Some plane passengers can be a nightmare to share a journey with – from a man who wedged his socks in the window shutter to the woman who dried her knickers using the overhead air vent .

The latest bizarre photo from on board a flight has left people shocked for a different reason altogether, leading to some saying things were ‘getting out of hand’.

The snap appears to show a miniature horse in the economy cabin of an American plane, standing in front of two seated passengers, as reported by the Express .

It was shared on the popular Passenger Shaming Instagram page with the caption: “Note: This is a legitimate, highly-trained service animal used for the blind etc. It is NOT an emotional support animal. They aren’t one in the same. Just an FYI. ”

The post racked up more than 800 comments and divided opinion – while others questioned if the image was genuine.

Others said they would love to share a flight with the miniature horse

Completely ignoring the message that the horse was not an emotional support animal, one user raged: “This ‘support animal’ thing is truly getting out of hand. What happened to dogs and cats???

“I’ll be damned if I am going to pay the prices they’re now charging to fly only to be sitting next to a freaking pony!!! Mind you, I love horses but enough is enough.”

Another said: “If you need to have a miniature horse by your side in order to fly on a commercial airline, perhaps another mode of travel will better suit you – not to mention the rest of the community of people your needs impact.”

Although there was some scepticism over whether the photo was real or not, another user pointed out that in 2019 American aircraft guidelines changed to allow passengers to take designated service animals on board.

So even if this particular photo is a fake, miniature horses have been spotted in airports and on planes before (please see above).

And people had concerns.

One wrote: “I get it but my concern is how is a pony going to effect the ability to evacuate the aircraft in the even of an emergency?

“Can that thing go down the emergency slide without hesitation? I honestly don’t know but everyone else shouldn’t shoulder that burden so one person can be comfortable.”

A second said: “I get it if it’s a service animal but where do they go potty?”

Another replied: “So we can’t eat nuts on a plane in case of allergies but we can take ponies on?!!?!?”

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More quirky stories

Others were far more positive about the possibility of sharing a flight with a miniature horse, as one wrote: “I would pay extra to sit next to a well behaved, clean service animal on a plane rather than a human.

“Service animals are highly trained and have better manners than most humans…”

Another said: “It would make my day if I encountered a miniature horse on my flight!”





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Uzbekistan has potential to become second economy after Russia



BAKU, Azerbaijan, Dec. 3

By Fakhri Vakilov – Trend:

Uzbekistan’s economy may become the second in the post-Soviet space, said Russian Minister of Economic Development Maksim Oreshkin, Trend reports citing the Uzbek media.

At a meeting at the Higher School of Economics National Research University in Moscow Oreshkin noted that reforms were underway in Uzbekistan’s economy, and when Uzbekistan’s President Shavkat Mirziyoyev came to power, there were many problems.

“Now they are being solved step by step, however, many problems remain,” said Oreshkin.

“However, in fact, I believe that Uzbekistan’s economy will be able to become the second economy in the post-Soviet space after Russia in about 20 years,” Oreshkin said.

The head of the Ministry of Economic Development also suggested students to visit Uzbekistan.

“I recommend everyone to visit Tashkent. Uzbekistan is a very beautiful country, so visit it in spring during student vacations.”

The fact that Uzbekistan is considering the issue of joining the EAEU became known during the October visit to Tashkent of the Chairman of the Federation Council of the Federal Assembly of the Russia Valentina Matviyenko.




Later, the first deputy chairman of the Senate of the Parliament, Sadyk Safayev, said that Tashkent has been studying the possibility of joining the EAEU. He emphasized that no one exerts pressure on Uzbekistan in this matter.

In March 2019, Oreshkin at a meeting with President Mirziyoyev praised the ongoing large-scale reforms in the country.

The parties noted that the new multi-level format of the dialogue – the creation of a Joint Commission on bilateral cooperation at the level of prime ministers of the two states – will contribute to the development of mutually beneficial cooperation.

Follow author on Twitter:@vakilovfaxri

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Canadian economy faces a prolonged period of sluggish growth


Canada’s economy is shifting into a lower gear as some of the country’s growth drivers begin to lose steam.

Statistics Canada will release third-quarter gross domestic product numbers Friday that will probably show a sharp drop in growth. According to the median forecast of economists in a Bloomberg survey, the country’s expansion slowed to a 1.3 per cent annualized pace in the three months through September, down from an unsustainable clip of 3.7 per cent in the prior period.

It’s a return to sluggish growth that may become the new normal for a Canadian economy seeing many of its engines of growth sputter, from investment and exports to weakening consumption as the nation’s households cope with high debt levels.

Beyond the third quarter, economists predict another 1.3 per cent reading in the final three months of 2019. Next year doesn’t look much better, with growth seen running at about 1.5 per cent in 2020. That’s a sufficiently prolonged period of below-potential growth for markets to anticipate the Bank of Canada will cut interest rates as early as January.

Canada’s exporters have floundered in the second half of the year. After a rebound in oil shipments temporarily boosted real exports in the second quarter, they’ve since flat-lined, falling 0.3 per cent since June in volume terms. Waning exports are also hitting manufacturers, whose shipment volumes decreased 1 per cent in the third quarter, led downward by oil and coal.

You don’t have a domestic demand story that’s strong

Brett House, deputy chief economist at Scotiabank

Business investment remains sluggish, down 22 per cent since oil prices began collapsing in 2014. While the Bank of Canada’s latest indicator of business activity ticked up, the central bank still sees investment as a 0.4 percentage point drag on 2019 growth. Until global uncertainty and trade tensions abate, Canadian businesses are unlikely to make major capital expenditures.

Consumption has long propelled Canada’s economic growth, but cracks may be forming, even with a robust job market and wages growing at the fastest pace in a decade. Economists expect consumption to pick up in the second half of the year, but that’s coming off a second quarter that was the slowest since 2012. The lack of vigour is most apparent in a retail sector that’s seen volumes flat over the past year.

“You don’t have a domestic demand story that’s strong,” said Brett House, deputy chief economist at Scotiabank.

One bright spot in the GDP numbers could be housing, which has rebounded as borrowing costs decline and buyers adjust to tighter mortgage rules. Home sales rose 7.3 per cent in the third quarter, the fastest quarterly pace since the end of 2017. Most economists estimate residential investment picked up for a second straight quarter.

Bloomberg.com





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