Finance dept issues fiscal update
Other details:
- Canada budget deficit to be C$3.9 billion in 2016 – 17
- cuts WTI assumption to $49 and 2015, $54 and 2016
- lowers 2016 GDP growth forecast at 2% from 2.2%
- budget update includes C$ 3 billion in risk set upside
- Canada lowers 2015 GDP growth forecast 1.2% from 2%
The Conservative budget forecasted a 2-3 billlion surplus for this year. The new liberal finance minister now sees a 3 billion deficit.
Canada's Finance Minister Morneau adds:
- Canada must focus on inclusive growth
- Canada economy hasn't performed as well as expected
- it is not possible to cut our way to prosperity
- Consensus at G20 is it is a challenging time for economy
- Risks to Canada economy tilted to downside
- Cites need for balance between fiscal responsibility and the government's campaign promises
- declined to save deficits will surpass C$10 billion
- worse economic outlook reinforces need for spending plan promised by liberals
The USDCAD is trading at 1.3302 as headlines start (at 10:45 AM ET). The pair is now finding a bid on the more sanguine government projections. Trades at new NA session highs into the London fixing.
