After meeting today with leading private sector economists, the Honourable Jim Flaherty, Minister of Finance, said real economic growth in Canada is projected to remain strong relative to other Group of Seven (G-7) countries.
“The good news is that real growth in Canada has been positive, if modest, and the economists in today’s session continue to see real growth going forward,” the Minister said. “However, Canada is not immune to the renewed weakness in the global economy, especially in Europe. In particular, Canada has been affected by lower commodity prices, which are dampening government revenue growth. This will have an impact on the fiscal outlook that was presented in Economic Action Plan 2012.”
The consensus at today’s meeting was that the average forecast in the Results of the Department of Finance’s October 2012 Survey of Private Sector Economists, released today by the Department of Finance, is a reasonable basis for fiscal planning. “This forecast will underpin the next Update of Economic and Fiscal Projections, which we will release in the weeks ahead,” said Minister Flaherty.
The Department of Finance bases its economic forecast for budget-planning purposes on the average of private sector economic forecasts. This practice introduces an element of independence into the fiscal forecast and is supported by organizations such as the International Monetary Fund.
Citing the effects of renewed weakness in the global economy on the fiscal outlook, Minister Flaherty stated, “despite the uncertainty outside our borders, through the Jobs and Growth Act, 2012 and other decisive initiatives, the Harper Government remains committed to returning to balanced budgets in the medium term.”
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