CANADA
- Yesterday’s Budget revealed deficits now projected across the forecast horizon in a change from the small surplus projected for 27/28, now narrowing only to 0.4% GDP in FY 27/28 from a little changed 1.4% GDP projected for the upcoming 23/24.
- The trend deterioration in public finances came from a combination of adverse economic developments and sizeable, but not unexpectedly so, new policy actions.
- However, of some consolation for the BoC, the majority of the larger of these new policy actions come later in the forecast horizon, something Mostafa Askari, a former senior finance department official, sees as not adding inflationary risks (MNI Interview here)
- One of the more surprising aspects from a macro perspective was a projected increase in net debt for FY 23/24 from 42.4 to 43.5% GDP, although FM Freeland was keen to point out that the fiscal anchor of declining debt over the medium-term remains intact.
- Net debt is projected to remain at the bottom of the G7 range.
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