Canada to Present Fall Economic Update on Nov. 30
|11/23/2020 | 03:47pm|
By Paul Vieira
OTTAWA--Canada will present an economic update next Monday, with the country's gross domestic product now at risk of shrinking again in the final three months of 2020 because of exponential growth in Covid-19 cases.
Deputy Prime Minister and Finance Minister Chrystia Freeland told lawmakers Monday the update, an annual tradition, will begin to set out how the Liberal government plans to rebuild the economy in the post-pandemic period "that is robust, inclusive and sustainable."
To date, Canada's fiscal package has totaled roughly 325 billion Canadian dollars, or the equivalent of $250 billion. Those outlays represent 17% of Canada's GDP, and additional spending is in the works, including a revised rent subsidy for businesses and an extension of existing programs.
Canada's heavy dose of virus-fighting stimulus is having repercussions. Its fiscal position is deteriorating at the fastest pace among the Group of 20 industrialized countries, based on data from the International Monetary Fund. The Canadian government said in July it projected a budget deficit in the current fiscal year, ending March 30, 2021, to swell to C$343.2 billion or 15% of GDP, versus a deficit accounting for 1.5% of GDP in the previous 12-month period.
That budget deficit figure could be revised higher in the update.
Canada's economy is expected to record annualized growth of roughly 45% in the third quarter, with official figures due Dec. 1. Some forecasting firms, however, have now scaled back expectations for the fourth quarter in part because of a second wave of Covid-19 infections that has forced authorities across the country to impose lockdowns affecting roughly 11% of the population -- including the city of Toronto, Canada's largest.
BMO Capital Markets, for instance, said it now expects no growth in the fourth quarter, versus its earlier estimate of 2.3% expansion.
Write to Paul Vieira at firstname.lastname@example.org
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