Canada’s budget watchdog says that Ottawa’s deficit likely doubled during the last fiscal year to $72 billion.
In its June forecast, the Parliamentary Budget Officer (PBO) said that the federal government’s budget deficit has likely ballooned from $36 billion the previous fiscal year.
The PBO cited “modest revenue growth” and growing expenses as the reasons for the budget deficit swelling.
The new forecast represents an estimate based on public accounts analyzed by the Parliamentary Budget Officer.
The federal government in Ottawa hasn’t yet released its latest data on the deficit.
The PBO said in its latest report that net new spending from Canada’s federal government will amount to $68.4 billion between 2025 and 2031.
The budget watchdog added that trade uncertainty and slower population growth have reduced “potential output growth in the short term.”
The latest projection of Ottawa’s budget deficit comes with Canada officially in a recession having recorded two consecutive quarters of no economic growth.
The PBO’s latest outlook forecasts that Canada’s gross domestic product (GDP) growth will decline from 1.7% in 2025 to 1.1% this year.
The Parliamentary Budget Officer also expects that the Bank of Canada will hold its key interest rate at 2.25% this year as rising fuel prices lead to an uptick in inflation.
The federal government’s fiscal year runs from April 1 to March 31.
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