Feds posts budget surplus

Fri Aug 22, 2008 11:35am EDT
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OTTAWA (Reuters) - Canada posted a June budget surplus of C$1.74 billion, bringing the year-to-date surplus to C$1.22 billion and reversing a deficit in the first two months of the fiscal year, the government said on Friday.

Both the monthly and three-month results were well below the year-earlier surpluses of C$2.82 billion in June 2007 and C$5.60 billion in April-June 2007.

Nonetheless, the Department of Finance said the performance in the first three months of the fiscal year was "consistent" with Finance Minister Jim Flaherty's forecast last February of a surplus in 2008-09 of C$2.3 billion.

Ottawa also cut its economic growth forecast for this year to 1.1 percent, in line with the outlook of private sector economists, from 1.7 percent previously. It maintained its estimate of nominal gross domestic product growth at 3.5 percent, citing higher commodity prices.

(Reporting by Louise Egan; editing by Rob Wilson)