Canada budget economists see 2015 growth at 2 pct -survey

Wed Apr 8, 2015 5:55pm EDT
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By Leah Schnurr

OTTAWA, April 8 (Reuters) - Canadian economists who provide the growth forecasts that will be used by the federal government in its April 21 budget see the economy expanding by 2 percent this year as the price of oil stabilizes, according to a Reuters survey.

The Canadian government has used the average of private sector growth projections as a basis for fiscal planning since 1994, with the forecast potentially making the difference between a deficit or surplus.

The 2 percent growth rate seen for 2015 is the median forecast of nine economists who responded to the Reuters survey out of 15 included in a government private sector poll in its fiscal update last November.

Growth is seen picking up slightly in 2016 to 2.2 percent.

Finance Minister Joe Oliver, who is meeting with economists in Ottawa on Thursday, has vowed the ruling Conservatives will balance the books in the 2015-2016 fiscal year.

The Conservatives have run seven years of deficits in the fallout from the global credit crisis, and the upcoming budget could set the tone for the party's bid to win re-election later this year.

Oliver announced legislation on Wednesday that would commit the government to a balanced budget, unless there is a recession or extraordinary circumstance.

The forecast for 2015 in the Reuters survey is not far from the 2.1 percent growth rate the Bank of Canada projected in January when it cut interest rates to 0.75 percent.   Continued...