UPDATE 1-Canada says GDP growth holding, but tax revenues off

Mon Oct 29, 2012 11:49am EDT
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* Private sector sees growth of at least 2 pct through 2017

* Lower commodity prices affecting tax revenues

* Flaherty says on track to balance budget in medium term

* Encouraged by signs of life in U.S. housing

OTTAWA, Oct 29 (Reuters) - Canada expects to maintain real economic growth of at least 2 percent through 2017, but lower commodity prices will cause government revenues to be a little lower than expected, Finance Minister Jim Flaherty said on Monday.

The consensus of private sector forecasts, surveyed by his department, is for 2.1 percent growth this year, unchanged from the consensus forecast in the March budget. For 2013, the forecast is cut to 2.0 percent from 2.4 percent, but for 2014 it rises to 2.5 percent from 2.4 percent.

Flaherty told reporters after meeting private sector economists that lower prices have affected the nominal level of gross domestic product (GDP), which is not adjusted for inflation.

He said that, in turn, was hitting government revenues a bit, but that Canada remained on track to balance its budget in the medium term.

"The October survey underlines the renewed weakness we have seen ... especially in Europe and the United States, our two largest trading partners," he said.   Continued...