OTTAWA (Reuters) - Private sector economists have cut their growth forecasts for the Canadian economy in 2013 due to volatile market conditions in the United States and Europe, Finance Minister Jim Flaherty said on Friday.
Flaherty, speaking to reporters after meeting the economists, did not give precise figures. Ottawa’s budget, expected later this month, is based on projections from around a dozen private sector economists.
Last October, the economists forecast real gross domestic product growth of 2.0 percent and nominal GDP growth of 4.0 percent in 2013.
Economists surveyed in a Reuters January poll forecast real GDP growth of just 1.8 percent in 2013. <ECILT/CA>
“The consensus coming out of the meeting is that Canada will continue to see modest gross domestic product growth in 2013. Yet, the private sector forecasts have been revised downward due to external pressures outside of the government’s control,” the government said in a statement.
“Canada is in the midst of a very volatile and risk-filled global environment due to unstable economic environments in Europe and the United States.”
Flaherty said that although government revenues would take “a significant hit” from lower-than-expected growth in nominal gross domestic product, Ottawa would balance the budget in the 2015/2016 fiscal year.
“We will manage it. They key is looking forward to the next two years and making sure that we stay on track to balance the budget in 2015/16. There are a number of measures we can take to do that, and you’ll see them in the budget,” he said.
Writing by David Ljunggren; Editing by Jeffrey Hodgson and Bernadette Baum