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Money Slower-than-expected economic growth to help Canada's defence spending numbers

14:20  13 december  2019
14:20  13 december  2019 Source:   msn.com

Statistics Canada reports pace of economic growth slowed in third quarter

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Australia reports weaker- than - expected economic growth for the July-to-September quarter, largely due to a drop off in mining investment. "Additionally, the consumer component of the national data surprised on the upside, with employment and spending picking up and the household savings ratio

Japan' s economy grew 2.6% last quarter, slower than expected , as companies wary about the prospects for a sustained recovery kept a tight rein on The data show that the strongest contribution to growth last quarter came from public spending and exports, while private investment weakened.

a group of people posing for the camera© Provided by The Canadian Press

OTTAWA — The federal government is predicting Canadian defence spending will inch closer to its NATO promises in the coming years than originally expected — though not because Ottawa is planning to send new money the military's way.

All NATO members, including Canada, agreed in 2014 to work toward spending the equivalent of two per cent of their gross domestic products on defence within the next decade as the military alliance sought to share the burden of defending from new threats like Russia and China.

Two years ago, when they unveiled their defence policy, the Liberals said the government would hit 1.4 per cent by 2024-25. But Defence Minister Harjit Sajjan this week said, without providing details, that defence spending would instead reach 1.48 per cent of GDP.

Despite U.S. calls for more, Canada's defence spending set to stay the same

  Despite U.S. calls for more, Canada's defence spending set to stay the same OTTAWA — Prime Minister Justin Trudeau is likely to face questions from other leaders of the NATO military alliance next week as new figures show Canadian military spending is expected to remain stagnant this year. All NATO members agreed in 2014 to work toward spending two per cent of their gross domestic products on defence within a decade, a pledge that has taken on added significance thanks to U.S. President Donald Trump.

Economic growth is the increase in what a country produces over time. It' s measured by GDP. This economic policy contrasts with that of the United States. It uses debt to finance short-term growth through boosting consumer and military spending .

US economic growth slows sharply in fourth quarter – live. Both consumers and businesses cut back on spending and US exports were hurt by economic weakness in overseas Economists surveyed by the Wall Street Journal had been expecting a marginally higher number , 0.8%, and the

An increase of that size could represent close to $2 billion more per year for the military. However, the Department of National Defence told The Canadian Press that there are no new investments on the horizon for the Canadian Armed Forces beyond what's already in the Liberals' policy.

Instead, Defence Department spokesman Daniel Le Bouthiller attributed the change to slower-than-expected economic growth over the next few years and more spending on non-military specific activities like veterans' benefits and the Canadian Coast Guard.

The government has included such activities in its calculations since 2017 to try to address complaints from the U.S. and other NATO allies that Canada was not investing enough in its military. NATO approved the change.

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  Analysis: NATO's defence budget formula is flawed — and Canada isn't going to meet its target Another NATO summit brings another chance for U.S. President Donald Trump to browbeat America’s allies for not spending enough on defence. Trump is angry that a number of NATO nations haven’t met an agreement, reached five years ago, to spend two per cent of their annual Gross Domestic Product on defence. Trump is angry that a number of NATO nations haven’t met an agreement, reached five years ago, to spend two per cent of their annual Gross Domestic Product on defence.

What is the impact of cutting government spending - does it cause an economic downturn or does it Ceteris paribus, a cut in government spending would be expected to have a negative impact on This would lead to lower economic growth and lower inflation. However, if other components, such

Some economists argue that cutting spending is the best medicine for restoring fiscal health. Others insist, on the contrary, that spending cuts are self-defeating Our second finding is that reductions in entitlement programs and other government transfers were less harmful to growth than tax increases.

"Approximately two-thirds of the increase from 1.40 to 1.48 per cent is due to increased (other government department) forecasts and one-third due to fluctuating GDP forecasts," Le Bouthillier said in an email.

Canada currently spends about 1.31 per cent of GDP — a common measurement of a country's economic output — on defence and has no plan to reach NATO's two per cent benchmark, a fact that has made it a target for U.S. President Donald Trump.

Trump labelled Canada "slightly delinquent" on defence spending during a meeting in London last week in which he publicly grilled Prime Minister Justin Trudeau about Canada's number before subsequently stepping up his calls for the government to meet the NATO target.

"He's not paying two per cent and he should be paying two per cent," Trump said during a meeting with German Chancellor Angela Merkel on Dec. 4. "It's Canada. They have money and they should be paying two per cent."

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It follows slow growth in number of hours worked (0.7%) and the wage price index (2.1%). Asked how the government could help boost incomes, Morrison nominated asset write-offs for small businesses, competition policy What a turn-up for the books: a big spending , big taxing Liberal party.

The revised number translates into an annualised growth rate of 1.1%, down from the initial reading of " Economic growth should start accelerating again in the fourth quarter as domestic demand Policymakers have argued that the increase is needed to help reduce Japan' s public debt - which

The Liberal government has in fact refused to say whether it believes in the two-per-cent target and has instead repeatedly pointed to Canada's contributions of forces and equipment to NATO missions in Latvia, Iraq and other places as a better measurement of its contributions to the military alliance.

The spending target is an imperfect way of measuring how much individual countries are contributing, said Stefanie von Hlatky, an expert on NATO and the military at Queen's University in Kingston, Ont.

But all allies are facing pressure to show Trump that they are stepping up on defence spending, she said, which is doubly true for Trudeau after his meeting with the U.S. president in London.

"I think there's a little bit of pressure now to maybe update those numbers and probably some rejoicing that it looks better on paper," von Hlatky said.

"If we're looking to impress Trump with these minor adjustments, maybe it's all for naught. But there is definitely added pressure with every NATO meeting and NATO summit. And we know it's going to come up as long as Trump is president."

Conservative defence critic James Bezan accused the Liberal government of playing a numbers game to make Canada look better rather than investing in the Armed Forces.

"It's a sad state of affairs for our military heroes when Justin Trudeau can only improve defence spending figures by engineering a made-in-Canada recession and playing a shell game with other departments' budgets to inflate the numbers," he said.

This report by The Canadian Press was first published on Dec. 13, 2019.

Lee Berthiaume, The Canadian Press

Ottawa sees lower economic growth over next five years as deficit continues to widen .
Ottawa sees lower economic growth over next five years as deficit continues to widenIn his fall economic update on Monday, Morneau said Canadian GDP growth is expected to grow at an average 1.8 per cent between 2019 and 2024. The projection is within the range considered healthy by economists, but still points to ongoing tensions over international trade that could send the global economy into a period of tepid growth.

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