Canada Lowers Economic Growth Projections

By Agence France-Presse Canada's economic growth and budget surplus projections have been lowered following the severe acute respiratory syndrome (SARS) and mad cow crises, Finance Minister John Manley said Nov. 3. Citing a panel of private economists, Manley said gross domestic product (GDP) was now expected to increase by just 1.9% this year and 3% in 2004. The initial prediction was for 3.2% in 2003 and 3.5% next year. Projections for the budget surplus for the current fiscal year have been reduced from C$4billion (US$3 billion) to $3.5 billion, Manley said. This is the second major downward adjustment for Canada's forecast growth. In June Manley lowered his forecast for GDP growth this year to 2.2%. In his midyear economic and financial update Manley blamed a combination of setbacks for the decline in the projected surplus including the SARS outbreak, one case of mad cow disease reported in May, a massive power blackout in Ontario and major forest fires in British Columbia. "2003 has been a tough year for the Canadian economy," Manley stressed. He added that the slower growth projections were due also in part to the recent "rapid increase in the value of the Canadian dollar. International trade figures also were being adversely affected by the sharp rise in the Canadian dollar, which, Manley said, had risen by 20% against the U.S. since February. Copyright Agence France-Presse, 2003