New reports forecasting a cooling housing market and slower consumer spending tied to record household debt suggest the Conservative government can’t count on growth to give them an easy ride to a balanced budget.
Erasing Canada’s deficit by 2015 – as first promised by Prime Minister Stephen Harper during this year’s election campaign – will require a mix of spending cuts and economic growth.
But the Parliamentary Budget Officer released a report this week questioning whether promised spending cuts will materialize, and a new update from TD Economics warns that Canada’s growth spurt is about to cool.
The news led NDP Leader Jack Layton to urge more caution when it comes to government cuts for fear of hurting employment and economic growth.
“Here we have the government jumping very quickly to a program of restraint, but we have some indications that the economy could be stalling or in some difficulty,” Mr. Layton said.
TD Bank’s quarterly economic forecast said economic growth in Canada has peaked as households focus on debt reduction and governments phase out stimulus spending. Releasing its first growth projections for 2013, TD Economics forecasts real GDP growth of 2.1 per cent. That’s below the 2.7 per cent average forecast from private-sector economists produced in March that was used as the foundation of the numbers in this month’s federal budget.
Full Article
Source: Globe & Mail
Erasing Canada’s deficit by 2015 – as first promised by Prime Minister Stephen Harper during this year’s election campaign – will require a mix of spending cuts and economic growth.
But the Parliamentary Budget Officer released a report this week questioning whether promised spending cuts will materialize, and a new update from TD Economics warns that Canada’s growth spurt is about to cool.
The news led NDP Leader Jack Layton to urge more caution when it comes to government cuts for fear of hurting employment and economic growth.
“Here we have the government jumping very quickly to a program of restraint, but we have some indications that the economy could be stalling or in some difficulty,” Mr. Layton said.
TD Bank’s quarterly economic forecast said economic growth in Canada has peaked as households focus on debt reduction and governments phase out stimulus spending. Releasing its first growth projections for 2013, TD Economics forecasts real GDP growth of 2.1 per cent. That’s below the 2.7 per cent average forecast from private-sector economists produced in March that was used as the foundation of the numbers in this month’s federal budget.
Full Article
Source: Globe & Mail
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