MONTREAL (Reuters) - The Canadian province of Quebec on Friday reported a budgetary surplus of C$3 billion ($2.3 billion) for the months of April to August, helped by higher revenues.
But Finance Minister Eric Girard said he does not expect the province to deliver such strong surpluses for the rest of the year, as rising interest rates and trade turbulence between the United States and China weigh on growth.
“Quebecers should not extrapolate the surplus that we have over five months ... (toward) the 12 month period because we know that revenues will be slower in the next seven months,” Girard told reporters.
Girard, a former Canadian banking executive, was named Finance Minister by the center-right Coalition Avenir Quebec (CAQ) party that came to power last month with a majority government.
The CAQ has said it will follow the debt fighting of Quebec’s former Liberal government, which won accolades from credit rating agencies for turning around the province’s finances.
The Liberals had promised to balance budgets from 2015 through 2020 after six years of deficits, while targeting a reduction in debt to 45 percent of gross domestic product by 2026 from 52.7 percent in 2017.
Girard said a new deal between Canada, the United States and Mexico to replace the North American Trade Agreement (NAFTA) was positive for the Canadian economy, offsetting U.S.-China trade friction “but probably not as much as the negative impact overall.”
He also cited rising interest rates, after Bank of Canada Governor Stephen Poloz repeated his message on Wednesday that Canadian rates would need to keep rising to meet the central bank’s inflation target.
Quebec, Canada’s second-most populous province, in June reported a C$2.4 billion surplus for the 2017-2018 fiscal year.
Reporting by Allison Lampert in Montreal; additional reporting by Fergal Smith in Toronto; editing by Grant McCool