Parliamentary Budget office "8.5% growth decline

March 25, 2009 11:56 p.m.

The head of the Canadian Parliamentary Budget office is predicting a much sharper fall in the GDP than has been forecast in the government's recent budget. He is also reporting a 15.3 % drop in gross domestic income in the last quarter of 2008. He forecasts a drop in the GDP of 8.5 % in the first quarter of 2009 and 3.5 % in the second quarter. This would make the Canadian recession the most severe since the Second world war. It is not good news for the Government which had passed a budget with only a very modest stimulus of about 2 % of the GDP. according to the parliamentary budget officer this budget and its modest stimulus has already been overtaken by the deeper recession. He predicts a rise in unemployment of 385,000 and a deficit of 38 billion by the end of the 2009 2010 fiscal year.
this gloomy assessment reinforces my fear that the government's budget stimulus was far too modest to do the job.
A stimulus of at least 100 billion would have been much more appropriate given the severity of the downturn and the huge impact upon manufacturing of the American slump.The government and the opposition should agree on a supplementary budget that contains exactly such a plan.