OTTAWA (Reuters) - The Canadian province of Quebec will run a higher-than-expected budget deficit of C$4.7 billion ($4.4 billion) this fiscal year, Finance Minister Raymond Bachand said on Tuesday.
In its March budget, the Quebec government had forecast a C$3.9 billion deficit. The shortfall includes a C$300 million reserve fund to cover possible additional revenue shortfalls.
Bachand -- blaming the global crisis for the gloomier prediction -- also said the economy would shrink by 1.5 percent this year, compared with the 1.2 percent contraction the government forecast in March.
He put growth next year at 1.7 percent, compared with the 1.9 percent growth forecast in the budget.
The predominantly French-speaking province of 7.5 million has been hit by the economic downturn in the United States, its main export market.
Bachand said Quebec’s deficit would be 1.6 percent of gross domestic product this year, compared with 4.4 percent in neighboring Ontario and 3.7 percent for Canada as a whole.
“Although we are announcing today a revised 2009-2010 deficit, we must acknowledge that Quebec’s public finances have coped better than is the case of many of our neighbors. Quebec’s public finances are under control,” he said in a statement.
Quebec’s budget deficit in the 2010-11 fiscal year will also be C$4.7 billion, some C$915 million higher than initially forecast, the government said. It said it was sticking to its commitment to balance the budget by the 2013-14 fiscal year.
Reporting by David Ljunggren; editing by Peter Galloway