United States federal budget

Fraser Institute News Release: Ontario government debt will reach 47 per cent of the economy (GDP) this year, requiring immediate action

Retrieved on: 
Tuesday, March 23, 2021
United States federal budget, Government spending, Australian federal budget, Federal budget, Finance, Money, Government

For example, to return to budget balancewithout increasing tax revenue beyond current projectionsthe Ontario government must reduce annual spending by 3 per cent of GDP.

Key Points: 
  • For example, to return to budget balancewithout increasing tax revenue beyond current projectionsthe Ontario government must reduce annual spending by 3 per cent of GDP.
  • While this would require sizeable spending reductions, there are historical precedents for spending-focused deficit elimination efforts of this size.
  • In fact, the Chrtien governments 1995 federal budget reduced annual spending by 4.6 per cent to eliminate the federal deficit in only two years.
  • The Ontario government has an opportunity to change course in its third budget, just like the Chrtien government did in its second budget 25 years ago, Lafleur said.

OneSmart International Education Group Limited Announces Unaudited Financial Results for the First Fiscal Quarter Ended November 30, 2020

Retrieved on: 
Tuesday, February 23, 2021
United States federal budget

This set up a much higher per student revenue thus a much more robust unit economics down the road.

Key Points: 
  • This set up a much higher per student revenue thus a much more robust unit economics down the road.
  • In the fiscal Q1, our marketing expenses accounted for 8% of cash sales, in line with pre-COVID FY2019 level.
  • Financial Results for the First Fiscal Quarter Ended November 30, 2020
    Net revenues were RMB684.8 million (US$104.1 million), a decrease of 14.1% from RMB797.2 million during the same period last year.
  • Capital expenditures for the first fiscal quarter of 2021 were RMB40.8 million (US$6.2 million), a decrease of 45.2% from RMB90.2 million in the first fiscal quarter of 2020.

Key House Committee Approves Direct Fiscal Assistance for American Cities

Retrieved on: 
Saturday, February 13, 2021
Biden family, Joe Biden, United States federal budget, Democrats United States), Presidents of the United States, Democratic Party United States)

WASHINGTON, Feb. 12, 2021 /PRNewswire/ -- Today the House Committee on Oversight and Reform approved a package of funding that includes $350 billion in direct fiscal assistance to states, local governments, territories and tribes.

Key Points: 
  • WASHINGTON, Feb. 12, 2021 /PRNewswire/ -- Today the House Committee on Oversight and Reform approved a package of funding that includes $350 billion in direct fiscal assistance to states, local governments, territories and tribes.
  • The legislation is the Committee's contribution to the larger Biden COVID rescue plan, which has made helping American cities a priority.
  • All across America, in cities big and small, mayors are confronting enormous budget deficits as a direct result of the coronavirus pandemic.
  • The funding approved by the committee today will be critical to helping cities, residents, and the American economy recover.

New CBO Economic Projections Support Targeted COVID Relief

Retrieved on: 
Monday, February 1, 2021
Deficit reduction in the United States, United States federal budget, Economy of the United States

The economic downturn "was not as sharp as expected" and "the first stage of the recovery took place sooner and was stronger than expected."

Key Points: 
  • The economic downturn "was not as sharp as expected" and "the first stage of the recovery took place sooner and was stronger than expected."
  • Going forward, the CBO projects vaccinations will reduce the number of coronavirus cases and, consequently, the extent of social distancing.
  • CBO will use this economic forecast as the basis for updating its budget projections for fiscal years 2021 to 2031.
  • It does not incorporate the economic effects of potential legislation, such as the $1.9 trillion COVID-19 relief and rescue plan advocated by the Biden Administration.

Fraser Institute News Release: Indigenous spending up 50% since 2015 despite evidence that more money won’t solve chronic problems

Retrieved on: 
Tuesday, January 26, 2021
United States federal budget

A constant flood of money from Ottawa has failed to solve the problems plaguing small remote First Nation communities yet the federal government continues to increase federal spending on Indigenous programs without material reforms, said Tom Flanagan, Fraser Institute senior fellow and author of Promise and Performance: Recent Trends in Government Expenditures on Indigenous Peoples .

Key Points: 
  • A constant flood of money from Ottawa has failed to solve the problems plaguing small remote First Nation communities yet the federal government continues to increase federal spending on Indigenous programs without material reforms, said Tom Flanagan, Fraser Institute senior fellow and author of Promise and Performance: Recent Trends in Government Expenditures on Indigenous Peoples .
  • In fact, in 1981 the gap was 19.5 compared to 19.1 in 2016.
  • And yet, according to federal budget projections, from fiscal year 2015-16 to 2021-22, federal spending on Indigenous programs will increase by 50 per centfrom $11 billion to more than $17 billion.
  • To protect the Institutes independence, it does not accept grants from governments or contracts for research.

FTC Publishes Annual Performance Report

Retrieved on: 
Tuesday, January 19, 2021
Financial accounting, Fiscal year, Government Performance and Results Act, United States federal budget

The Federal Trade Commission published its Fiscal Year 2020 Performance Report as required under the Government Performance and Results Modernization Act of 2010.

Key Points: 
  • The Federal Trade Commission published its Fiscal Year 2020 Performance Report as required under the Government Performance and Results Modernization Act of 2010.
  • The report documents the progress made by the Commission in achieving the mission and performance goals established in the Fiscal Year 2020-2021 Performance Plan.
  • Also, as required by the Government Performance and Results Modernization Act during a transition in administration, the Commission will submit its Fiscal 2021-2022 Performance Plan along with its Fiscal Year 2022 budget request in support of the Presidents FY 2022 budget for the federal government later this year.
  • The Commission vote to submit the Performance Reportto Congress was 5-0.

FTC Publishes Annual Performance Report

Retrieved on: 
Tuesday, January 19, 2021
Financial accounting, Fiscal year, Government Performance and Results Act, United States federal budget

The Federal Trade Commission published its Fiscal Year 2020 Performance Report as required under the Government Performance and Results Modernization Act of 2010.

Key Points: 
  • The Federal Trade Commission published its Fiscal Year 2020 Performance Report as required under the Government Performance and Results Modernization Act of 2010.
  • The report documents the progress made by the Commission in achieving the mission and performance goals established in the Fiscal Year 2020-2021 Performance Plan.
  • Also, as required by the Government Performance and Results Modernization Act during a transition in administration, the Commission will submit its Fiscal 2021-2022 Performance Plan along with its Fiscal Year 2022 budget request in support of the Presidents FY 2022 budget for the federal government later this year.
  • The Commission vote to submit the Performance Reportto Congress was 5-0.

FTC Publishes Annual Performance Report

Retrieved on: 
Tuesday, January 19, 2021
Financial accounting, Fiscal year, Government Performance and Results Act, United States federal budget

The Federal Trade Commission published its Fiscal Year 2020 Performance Report as required under the Government Performance and Results Modernization Act of 2010.

Key Points: 
  • The Federal Trade Commission published its Fiscal Year 2020 Performance Report as required under the Government Performance and Results Modernization Act of 2010.
  • The report documents the progress made by the Commission in achieving the mission and performance goals established in the Fiscal Year 2020-2021 Performance Plan.
  • Also, as required by the Government Performance and Results Modernization Act during a transition in administration, the Commission will submit its Fiscal 2021-2022 Performance Plan along with its Fiscal Year 2022 budget request in support of the Presidents FY 2022 budget for the federal government later this year.
  • The Commission vote to submit the Performance Reportto Congress was 5-0.

LifeVantage Announces Financial Results for the First Quarter of Fiscal 2021

Retrieved on: 
Tuesday, November 3, 2020
Financial accounting, Fiscal year, Fiscal policy, Economic impact of the COVID-19 pandemic, United States federal budget, Fiscalization

* All comparisons are on a year over year basis and compare the third quarter of fiscal 2020 to the third quarter of fiscal 2019, unless otherwise noted.

Key Points: 
  • * All comparisons are on a year over year basis and compare the third quarter of fiscal 2020 to the third quarter of fiscal 2019, unless otherwise noted.
  • For the first fiscal quarter ended September30, 2020, the Company reported revenue of $54.8 million, a 2.5% decrease over the first quarter of fiscal 2020.
  • Operating income for the first quarter of fiscal 2021 was $3.5 million, or 6.4% of revenue, compared to $2.6 million, or 4.6% of revenue, for the first quarter of fiscal 2020.
  • The Company is reiterating its outlook for fiscal 2021, which was initially provided when the Company reported fourth fiscal quarter and full fiscal year 2020 results on August 18, 2020.

ECB staff macroeconomic projections for the euro area, September 2020

Retrieved on: 
Friday, September 11, 2020
Eurozone, Economy, European Union, Currency, Gross domestic product, Euro, Inflation, Deficit reduction in the United States, United States federal budget

OverviewThis unprecedented collapse in activity reflects the adverse impact of strict lockdown measures implemented in most euro area countries around mid-March.

Key Points: 

Overview

    • This unprecedented collapse in activity reflects the adverse impact of strict lockdown measures implemented in most euro area countries around mid-March.
    • The impact was subsequently tempered by the gradual relaxation of these measures from May onwards as well as by behavioural changes in response to the pandemic.
    • This suggests a strong yet incomplete rebound of real GDP, which is projected to grow by 8.4% in the third quarter.
    • These containment measures, together with elevated uncertainty and worsened labour market conditions, are expected to continue to weigh on supply and demand.
    • Disinflationary effects are expected to be broad-based across the services and goods sectors, as demand remains weak.
    • Overall, HICP inflation is expected to increase from 0.3% in 2020 to 1.0% and 1.3% in 2021 and 2022, respectively.
    • [1] In view of the uncertainty about how the pandemic will evolve, two alternative scenarios have been prepared.
    • In contrast, the severe scenario with a strong resurgence of the pandemic implies a return to stringent containment measures.
    • By the end of the horizon, it stands around 9% below its level in the December 2019 Eurosystem staff projections, with inflation at only 0.7% in 2022.

1 Key assumptions and policy measures underlying the projections

    • The baseline rests on a number of critical assumptions concerning the evolution of the pandemic.
    • The economic recovery is assumed to be initially largely focused on manufacturing and some service sectors, while other services, e.g.
    • Similar assumptions about the evolution of the pandemic underlie the international projections (see Box 2).
    • Significant monetary, fiscal and labour market policy measures will help support incomes, reduce job losses and bankruptcies, and will be largely successful in containing adverse real-financial feedback loops.
    • These measures include extensive short-time work schemes and wage subsidies which cushion the impact of the collapse in activity on employment and labour incomes.
    • In terms of fiscal assumptions, the baseline only reflects its impact to the extent that some of the recently adopted national measures may be funded by the NGEU.
    • Importantly, both the monetary policy measures as well as the government credit and capital instruments act as backstops, notably reducing the tail risks of adverse real-financial feedback loops.

2 Real economy

    • Real GDP registered an unprecedented decline in the second quarter of 2020.
    • According to Eurostat, real GDP fell by 11.8% in the second quarter, extending the decline incurred in the first quarter and pushing real GDP down by about 15% compared with the fourth quarter of 2019 (see Chart 1).
    • Chart 1 Euro area real GDP (quarter-on-quarter percentage changes, seasonally and working day-adjusted quarterly data)
    • Surveys compiled by the European Commission as well as the Purchasing Managers Indices (PMIs) have rebounded from the troughs recorded in April 2020.
    • The PMI composite output rebounded to an average of 53.4 in July/August from a low of 13.6 in April and an average of 31.3 in the second quarter, signalling a rebound of real GDP in the third quarter.
    • This also points to a strong increase in real GDP in the third quarter.
    • Nevertheless, real GDP will only gradually recover towards pre-crisis levels.
    • This implies that, by the end of the projection horizon, real GDP would stand around 3% below the level expected in the December 2019 Eurosystem staff projections, the latter taken as denoting the path of the economy in the absence of the COVID-19 pandemic.
    • Turning to the components of GDP, private consumption is expected to decline by a historical record of 8.0% in 2020.
    • Although losses in real disposable income related to the lockdowns were largely cushioned by public transfers, the decline in consumption was amplified by a combination of forced savings and precautionary savings.
    • On the one hand, forced savings resulted from the fact that households whose income was unaffected were not able to buy non-essential goods and services.
    • On the other hand, precautionary savings increased due to the steep decline in consumer confidence and an unprecedented increase in uncertainty about the economic and employment outlook.
    • Private consumption is projected to continue recovering in 2021 and to surpass its pre-crisis level only during 2022.
    • The technical assumptions about interest rates and commodity prices are based on market expectations with a cut-off date of 18 August 2020.
    • The methodology gives an average level for these short-term interest rates of -0.4% in 2020 and -0.5% in 2021 and 2022.
    • The assumption for the effective exchange rate of the euro has been revised up by 3.1% since the June 2020 Eurosystem staff projections.
    • The adverse effects on housing demand of lower disposable income, weaker consumer confidence and higher unemployment are expected to lead to persistently subdued housing investment.
    • This is expected to stand more than 2% below its pre-crisis level at the end of the projection horizon.
    • As such, business investment for the euro area is expected to reach its pre-crisis level only towards the end of the projection horizon.
    • The COVID-19-related containment measures caused an unprecedented and synchronised fall in global output and trade in the second quarter of 2020.
    • Global real GDP (excluding the euro area), after contracting by 3.7% in 2020, is projected to rebound and grow at 6.2% in 2021 and 3.8% in 2022.
    • Some forms of social distancing are assumed to remain in place and a medical solution is expected only by mid-2021.
    • Compared with the June 2020 Eurosystem staff projections, global real GDP growth (excluding the euro area) has been revised marginally upwards for 2020 and 2021 and is largely unrevised for 2022.
    • Disruptions in global production chains and increased trade costs as part of the containment measures have taken a toll on global trade.
    • Looking ahead, while global trade is expected to bounce back along with economic activity, some scarring effects will materialise.
    • In growth terms, however, the less sharp contraction in imports the first half of 2020 is assumed to be followed by a less steep rebound.
    • As a result, net exports are projected to be negative in 2020.
    • From mid-2021 onwards both exports and imports grow in tandem, implying a neutral contribution of net exports to growth over the remainder of the projection horizon.
    • Also, a reduction in hiring opportunities may have led to discouragement, with many people moving out of the labour force.
    • Compared with the June 2020 Eurosystem staff projections, the projection for real GDP growth has been revised up in 2020 and remains largely unchanged over the rest of the horizon.
    • Real GDP growth has been revised up for 2020, mainly on account of a better than expected outcome in the second quarter.
    • The scenarios vary according to different assumptions about the pandemic and how the economy will respond.
    • Assumptions about the economy concern the behavioural responses of economic agents adjusting to economic disruptions and the longer-lasting effects on economic activity, once all containment measures have been lifted.
    • The sustained efforts to prevent the spread of the virus in the severe scenario would continue to significantly dampen activity across sectors of the economy until a medical solution becomes available.
    • The latter is assumed to occur by mid-2021 but its implementation would not be effective in containing the virus in the severe scenario.
    • Compared with the narrative in the baseline, the severe scenario features a more sizeable and more prolonged weakness in activity across sectors.
    • These scenarios for the euro area are based on the same broad narratives for the global economy and thus for euro area foreign demand.
    • Euro area foreign demand would fall in 2020 by around 8.6% and 15.5% under the mild and the severe scenarios, respectively.
    • Euro area real GDP rises by between 4.8% in the severe scenario and 9.4% in the mild scenario in the third quarter, but growth moderates in the fourth quarter under both scenarios (see Chart A).
    • Real GDP growth moderates to 5.0% and 1.3% in the fourth quarter, respectively, in the mild and the severe scenarios.
    • Chart A Alternative scenarios for real GDP and HICP inflation in the euro area (index: Q4 2019 = 100 (left-hand chart); year-on-year rate (right-hand chart))
    • Real GDP is projected to rebound more strongly under the mild scenario than under the severe one on average over 2021-22 (see Table A).
    • Under the mild scenario, as containment measures allow for a gradual normalisation of economic activity, real GDP is projected to rebound strongly in 2021.
    • This is helped by the assumed deployment of an effective medical solution by mid-2021, which ensures a relatively strong pace of recovery also in 2022.
    • Real GDP would recover to well above its baseline level in the course of 2021 and would end up being around 4.5% higher than the baseline by the end of 2022.
    • The profile for economic activity is expected to be virtually flat in 2021, while real GDP would fall 5.8% below the baseline by the end of 2022.
    • As long as the duration of the downturn is uncertain, there may be little inclination to immediately change price setting.

3 Prices and costs

    • Despite the partial recovery in oil prices in recent months, HICP energy inflation is expected to provide a large negative contribution to headline inflation in 2020.
    • Over the remainder of the projection horizon, the assumed increases in oil prices and some upward effects from environmental tax increases imply a rise in HICP energy inflation.
    • Following the temporary surge in HICP food inflation in April 2020 caused by the outbreak of COVID-19, food prices on a monthly basis started to moderate already as of May, as lockdowns were eased and supply constraints loosened.
    • Annual food price inflation is expected to decrease in the course of this year before increasing gradually over the remainder of the horizon.
    • Over the coming months, disinflationary effects are expected to be broad-based across the prices of services and goods, as demand will remain subdued or hampered by measures to contain the spread of the virus.
    • Indirect effects from the assumed recovery in oil prices will also support the pick-up in underlying inflation.
    • Growth in unit labour costs is projected to be subject to strong fluctuations over the projection horizon, reflecting the sharp movements in labour productivity growth.
    • The loss in labour productivity in the second quarter of 2020, due to GDP falling by more than employment, pushes up unit labour costs significantly.
    • The subsequent rebound in labour productivity implies a strong fall in unit labour costs.
    • Beyond the crisis-related volatility, unit labour costs are subsequently expected to move broadly sideways.
    • Profit margins are expected to broadly buffer the strong swings in unit labour costs over the projection horizon.
    • Import prices are expected to fall markedly in 2020 but to rebound somewhat in 2021 and 2022.

4 Fiscal outlook

    • The fiscal stance[3] is assessed to be highly expansionary in 2020.
    • This is mainly underpinned by the extraordinary fiscal measures taken by all euro area countries in response to the pandemic.
    • Based on government-approved or legislated measures at the cut-off date for fiscal assumptions, most of the pandemic-related measures are temporary and expire at the end of 2020.
    • The increase in the budget deficit in 2020 stems from the fiscal emergency measures and the negative cyclical component, which reflects the worsening of the macroeconomic conditions.
    • The improvement in 2021 mainly relates to the partial unwinding of the fiscal emergency measures, as well as the less detrimental cyclical component.
    • Compared with the June 2020 Eurosystem staff projections, the fiscal projections for the euro area show a higher budget deficit path over 2020-21, mainly on account of the loosened cyclically adjusted balance.
    • However, these forecasts are not strictly comparable with one another or with the ECB staff macroeconomic projections, as they are finalised at different points in time.
    • Additionally, these projections use different and partly unspecified methods to derive assumptions for fiscal, financial and external variables, including oil and other commodity prices.
    • The current projection for real GDP growth is higher than those of most other forecasters in 2020 and lower in 2021.
    • Comparison of recent forecasts for euro area real GDP growth and HICP inflation (annual percentage changes)


    © European Central Bank, 2020 Postal address 60640 Frankfurt am Main, GermanyTelephone +49 69 1344 0Website www.ecb.europa.eu All rights reserved. Reproduction for educational and non-commercial purposes is permitted provided that the source is acknowledged. For specific terminology please refer to the ECB glossary (available in English only).