Minister of finance announces updated economic growth projections from leading private sector economists

October 25, 2011

The Honourable Jim Flaherty, Minister of Finance, today released updated economic growth projections from leading private sector forecasters after meeting with them to gather their views on economic prospects for the country. The projections will form the basis of the next Update of Economic and Fiscal Projections.

“As we all know, although our domestic economy remains strong, global economic growth has weakened in recent months, and this will affect us here in Canada,” said Minister Flaherty.

The ongoing situation in Europe and the uncertainty in the United States have contributed to weakening global growth since the June budget.

“The private sector forecasters I met with today believe that recent global economic headwinds will continue to limit growth in Canada through 2012,” he said. “Today’s private sector economic forecast will form the basis of the annual Update of Economic and Fiscal Projections,which we will release in the weeks ahead.”

The Department of Finance bases its economic forecast for budget-planning purposes on the average of private sector economic forecasts. This practice introduces an element of independence into the fiscal forecast and is supported by organizations such as the International Monetary Fund.

The Department surveyed 15 leading private sector forecasters in mid-September.

Private sector forecasters agreed that the average economic forecast from the survey was a reasonable planning base for the upcoming Update of Economic and Fiscal Projections.

“We have a plan to keep Canadians and Canadian businesses on the right track to succeed with the Next Phase of Canada’s Economic Action Plan,” said Minister Flaherty, “We need to stay the course with that plan to support jobs and economic growth. In doing so, our Government remains committed to balancing the budget in the medium term.”