By Canadian Press

Economy to ‘stagnate,’ federal deficit expected to balloon to $46.5B this year: PBO

Oct 13, 2023 | 10:37 AM

OTTAWA — The parliamentary budget officer says higher interest rates will lead the economy to stagnate in the second half of the year and the federal deficit will rise significantly this fiscal year. 

The PBO released its economic and fiscal outlook today, providing updated projections for the economy and federal finances as high interest rates weigh on growth.

The budget officer also says it expects consumer spending to remain weak in the second half of 2023 and throughout the first half of 2024. 

Faced with slower growth in government revenues and higher expenses, the federal deficit is projected to rise to $46.5 billion in 2023-24, up from an estimated $38.7 billion for 2022-23. 

The PBO assumes the Bank of Canada will hold its key interest rate at five per cent and begin cutting rates in April 2024. 

roster shakeup

Nanaimo Clippers lose two major players to Major Junior ranks

7h ago

armed robbery

Knife-wielding man robs south Nanaimo liquor store

14h ago

Shorthanded

Clippers fall short hosting Bulldogs

21h ago

Its inflation forecast anticipates a return to two per cent inflation by the end of next year. 

This report by The Canadian Press was first published Oct. 13, 2023. 

The Canadian Press