Canadian Real GDP Shrank By 0.1 Per Cent In August Says StatsCan

OTTAWA - Canada's economic expansion came to a surprising halt in August, posting the first decline since February and setting the stage for the worst quarter of economic activity in more than a year.

Real gross domestic product shrank by 0.1 per cent over the month, with both temporary and fundamental factors taking the steam out of what economists had expected to be a relatively healthy 0.2 per cent advance.

Finance Minister Jim Flaherty cautioned against overreacting to the one-month setback, saying the economy is growing.

Economic Forecast Canada: PBO Says Slower Growth To Sap $22 Billion Annually From Economy

OTTAWA - Canada's budget watchdog says slower growth will sap about $22 billion annually from the country's economy.

Parliamentary Budget Officer Kevin Page says in a new report that he anticipates economic growth will brake to an annual rate of 1.6 per cent in the second half of this year, after slowing to 1.8 per cent in the first half.

Chinese companies warn profits plunging as slowdown spreads

Some of China’s biggest companies, from tech giants to airlines and retailers, are warning of unexpectedly sharp drops in profit of up to 80 per cent, adding to pressure on Beijing to reverse a painful economic slump.

On Wednesday, Air China Ltd., one of three main government-owned airlines, warned first-half profit will fall by at least half from a year earlier. State-owned ZTE Corp., one of the world’s biggest producers of telecommunications equipment, is projecting a decline of up to 80 per cent.

Bank of Canada stays put on interest rates, says economy doing worse than thought

OTTAWA — Low borrowing costs will remain for awhile longer after The Bank of Canada moved Tuesday to keep interest rates low, noting the economic recovery is being blown slightly off course by a perfect storm of global turbulence that is affecting all major economies.

But in a statement that was not as dovish as some anticipated, the central bank gave no comfort to those looking for the next move to be an interest rate cut, rather than an increase.

The Chinese resource supercycle slows down

In the far corner of the Haidian district near Beijing’s North Fifth Ring Road highway, a young steel salesman, Sun Minglong, sits in the near-deserted storefront office for the Beijing Jicheng Heng Da Gang Tie Ji Tuan steel company.

The company’s warehouse, once brimming with steel building components, is now only one-third full, Mr. Sun laments. Beijing’s construction boom, in full force up until just a few months ago, has geared down sharply. Mr. Sun says sales are so slow these days, he no longer orders new stock unless a buyer requests it.

“The profits in steel are getting really bad now, because Beijing’s housing market is slowing down. Nobody is building any houses because they don’t make money anymore,” Mr. Sun said. “Compared to last year there has been a real decline. Personally, I think it’s going to get worse and worse.”

China faces inflation, growth risks: Wen

Chinese Premier Wen Jiabao said China faces rising inflation risks even as its economy fights growth headwinds, hours after data showed the world’s second-biggest economy grew at its slowest pace in nearly three years in the first quarter.

Mr. Wen said Beijing would continue to improve and fine-tune macroeconomic controls and policy in a timely way to deal with the challenges, but he reiterated that the government would keep its restrictions on the Chinese property market.

China’s economy grew 8.1 per cent between January and March, data showed on Friday, missing analysts’ forecasts and raising concerns that growth could slow further without adequate policy support.

Original Article
Source: Globe
Author: Reuters

Girding for China's slowdown

A bright spot, but dimming

When we’re talking about a slowdown in China, it’s important to remember that this is only relative to the country’s high-octane expansion of recent years.

Year-over-year growth in China’s gross domestic product was 8.9 per cent in the last quarter of 2011, and is expected to dip to about 8 per cent for the first quarter. Most economists still see growth topping 8 per cent in 2012 and again in 2013. By contrast, total world GDP growth will be lucky to top 3 per cent, and developed economies could be well under 2 per cent.

Last month, China’s government lowered its official GDP growth target to 7.5 per cent from its previous long-standing target of 8 per cent – which would represent the slowest annual growth in the Chinese economy since 1990.

“China is likely to remain a bright spot [in the global economy], albeit not quite so luminescent as in the past,” concluded CIBC World Markets economist Peter Buchanan in a research report last week.