Blogs & Comment

Economy deteriorating faster than Harper thinks

It was bound to happen at some point, but Stephen Harper revealed yesterdaythat he’s going to have to revise his budget forecast, just two months after the late-January budget announcement.
“This government, I’m sure, all governments, will consult with various private forecasters as we go through, revise our forecasts, see if we need to revise our plans,” Harper told a reporters in Levis, Quebec.
His comments come the day after Kevin Page, the country’s independent parliamentary budget officer, said the Canadian economy would crumble a lot quicker than what the government predicted in its budget.
“Recent economic data and the parliamentary budget office’s updated survey of private-sector forecasters suggest a further significant deterioration in the outlook for the Canadian economy relative to budget 2009’s fiscal planning assumptions,” Page revealed to the House of Commons.
Page says the GDP will contract by 15% in Q1 and 4% the next quarter and that the deficit will end up being about $73 billion. The budget predicts the GDP will fall by 1.2% in 2009, while the deficit is pegged at $64 billion.
This is another blow to Harper’s rosier economic outlook and puts him in a politically precarious position. Does he try to stay positive to keep Canadians from getting even more anxious about the economy? Or does he follow the consensus and risk being a downer?
When he says things like this though “Forecasts are going to change very rapidly in this environment. Our forecasts were based at the time on the best assessments of those who specialize in this business” it makes me wonder what’s the point of telling Canadians the country will bounce back stronger than everyone else? It’s impossible to know, and whatever he says will be out of date tomorrow anyway, so telling it like it is, I think, would be better than telling people how he wants things to be.