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Rising Tensions in the Gulf as Iran Strikes and Trump Rebukes Allies

  An aerial view of the island of Qeshm, separated from the Iranian mainland by the Clarence Strait. Iran has launched a new wave of attacks on U.S. Gulf allies, escalating an already volatile regional conflict. On Tuesday, Iranian forces targeted the United Arab Emirates in what officials described as retaliatory strikes amid the ongoing U.S.-Israeli war with Iran. President Donald Trump publicly criticized Gulf allies for what he called a lack of gratitude and cooperation during a tense naval standoff in the Strait of Hormuz.  Escalating Conflict The conflict, now in its third week, has seen Iran expand its attacks beyond expected targets, striking both the UAE and Israel. U.S. officials revealed that Trump had been warned such retaliation was likely, despite his claims of being caught off guard.  Strategic and Economic Fallout The Strait of Hormuz remains largely closed, with U.S. allies refusing Trump’s requests to help reopen the critical waterway. This blo...
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Canada’s economy shrinks in Q3 amid export and consumer woes

 


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Canada’s economy shrinks in Q3 amid export and spending woes

Canada’s economy contracted by 1.1 per cent on an annualized basis in the third quarter of 2023, according to Statistics Canada. This was a much weaker result than expected by analysts and the Bank of Canada, which had forecast a slight growth of 0.1 per cent and 0.8 per cent, respectively.

The main factors behind the economic decline were a drop in exports, a slump in business investment, and a stagnation in consumer spending. Exports fell by 5.1 per cent, reflecting lower shipments of energy products, motor vehicles, and aircraft. Business investment decreased by 10.1 per cent, as firms reduced their spending on machinery and equipment, intellectual property, and non-residential structures. Consumer spending was flat, as households saved more of their income amid rising interest rates.

The only bright spots in the third quarter were government spending, which increased by 7.3 per cent, boosted by a one-time GST/HST credit payment, and residential housing investment, which rose by 8.3 per cent, driven by a surge in new construction.

The Canadian economy also performed poorly compared with the U.S. economy, which grew by 5.2 per cent in the same period. Canada has been more sensitive to the impact of higher interest rates, which have been raised by the Bank of Canada to 5 per cent from 0.25 per cent since early 2022. The central bank has recently signalled that it may pause or reverse its tightening cycle, as inflation has eased and economic growth has faltered.

Some economists believe that the third quarter contraction was a temporary setback and that the economy will rebound in the fourth quarter and beyond. Statistics Canada estimated that GDP grew by 0.2 per cent in October, indicating a modest recovery. However, others warn that the economy may face more headwinds in the new year, such as the ongoing supply chain disruptions, the spread of the new COVID-19 variant, and the uncertainty over the federal fiscal policy.

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