Wednesday, 24 February 2016

Federal Budget Deficit v2

What will be the federal government budget deficit for the 2016-2017 fiscal year, according to the budget as originally tabled?
Less than $15 billion: 5%
Between $15 and $20 billion: 15%
Between $20 and $25 billion: 50%
Between $25 and $30 billion: 20%
More than $30 billion: 10%

The federal government is projecting a deficit of $18.4 billion in 2016-2017, before new spending programs are accounted for (see story here).  There is speculation that the deficit could be large as $29 million (see story here).

It seems likely that the deficit will be in the $20 to $25 billion range, given additional spending; that would allow the Liberals to fulfil their promise of reducing the debt-to-GDP ratio.  A larger deficit is possible if the Liberals want to spend more, and a smaller deficit is possible if conditions improve.  A deficit larger than $30 billion seems unlikely, as does a deficit significantly smaller than the most recent projection.

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