Canadian Finance Minister Jim Flaherty could abandon his plan to eliminate the country’s budget deficit in 2015 if economic growth remains sluggish, the International Monetary Fund said.
Fiscal policy will be a “modest headwind to growth” that is already threatened by the risk of another year of weak global demand for Canada’s exports, the IMF said in its annual Article IV consultation report today.
“It’s important to strike the right balance,” between growth and curbing spending, Roberto Cardarelli, the IMF’s chief of mission to Canada, said on a conference call. “There is room to delay the adjustment needed to return the budget to balance in 2015 if there is no meaningful pickup in growth.”
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