Canadian PM says may be hard to keep balanced budget promise

Thu Feb 11, 2016 10:10am EST
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OTTAWA Feb 11 (Reuters) - The Canadian government could find it hard to balance the budget by 2019/20 as promised if the economy continues to struggle, Prime Minister Justin Trudeau said in an interview published on Thursday.

Trudeau, speaking to the French-language La Presse newspaper, also confirmed the budget deficit in the 2016/17 fiscal year would be larger than the C$10 billion ($7.1 billion) his new Liberal government initially committed to.

Trudeau won power last October promising to run three consecutive modest budget deficits to help fund infrastructure spending he says is needed to boost a struggling economy.

At the time he said the deficit would be eliminated by 2019/20, but since then the price of oil - a major Canadian export - has fallen more than expected, curbing growth.

Asked about the commitment to balance the budget by 2019/20, Trudeau replied: "If you look at the growth forecasts for the next three or four years, that will be difficult."

Trudeau added, however, that governments often missed the target when predicting growth four years out.

"Investing in infrastructure and putting money into the pockets of middle class families will have a positive effect on growth and we think we can change the growth rate, it's quite feasible," he said.

Liberal officials told Reuters last month the poor state of the economy meant the 2016/17 deficit would be larger than initially promised.

"Yes, we will exceed C$10 billion. By how much? We're examining that now," Trudeau told La Presse.

($1=$1.40 Canadian) (Reporting by David Ljunggren; Editing by Paul Simao)