The federal government's updated fiscal plan released last week, which reiterated the commitment to control program spending, is likely to come undone next year if, as we fear, economic growth slows by more than the government's projections suggest. The negative impact of slower economic growth, however, should be partially offset by lower than budgeted debt servicing costs as government bond yields remain at unusually low levels. Although the small budget deficit might linger for longer, the government remains in a good position to weather foreign and domestic headwinds.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to gain:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services