Provincial Finance Minister Says Growth Will Be Slower than Expected

By 250 News

The possibility of a prolonged U.S. recession, continued turmoil in world financial markets and slowing demand for B.C. products are the primary reasons the B.C. Economic Forecast Council has lowered
growth projections for the Province, Finance Minister Colin Hansen announced today.

"Based on recent global developments, Economic Forecast Council members have reduced their outlooks," said Hansen. "However, B.C. remains in a strong position to weather the current economic downturn and the 2010
Winter Olympics are expected to provide a significant and well-timed boost to the provincial economy."

The average of the collected forecasts from the Economic Forecast Council now projects B.C.'s real gross domestic product at 1.3 per cent this year, down from the previous forecast of 1.4 per cent. For 2009,
the forecast economic growth is expected to average 0.6 per cent, down from 1.3 per cent. Forecasts indicate growth is expected to average 2.7 per cent in 2010 and 2.6 per cent from 2011 to 2013.

Members of the council note that government revenues will be negatively affected by a slowdown in the resource sector, and a prolonged U.S. recession would continue to hurt B.C.'s trade sector, especially
forestry.

"B.C. has fared well given the current economic climate in much of the rest of North America," said Hansen, following a meeting with members of the council. "Although we have seen a weakening of economic growth in
the Province, we remain in a strong financial position, and B.C.'s growth projections are above those for North America as a whole."

During the meeting, members of the council discussed a broad range of economic issues including the ongoing recession in the U.S., the timing of its recovery, how it will affect B.C., the potential effectiveness of
fiscal stimulus packages, and the economic impacts of the 2010 Winter Olympic Games.

The Economic Forecast Council represents some of the most respected independent thinkers on economic forecasting in Canada. The council provides critical economic advice to the minister of finance in
developing each year's Economic and Fiscal Plan.

Individual council members' growth forecasts for B.C.'s real gross domestic product are included in the attached backgrounder.

The Economic Forecast Council as part of the annual budget process. The council is comprised of 12 economic experts from various banks and private sector forecasting groups.
Here are the participants and their  predictions:

bParticipant: Marie-Christine Bernard
Organization: Conference Board
Per cent change in real GDP:
2008: 1.2
2009: 1.1
2010: 2.7
2011-2013 Average Annual: 2.7

Participant: Jock Finlayson
Organization: BC Business Council
Per cent change in real GDP:
2008: 1.2
2009: 0.4
2010: 2.8
2011-2013 Average Annual: 2.6

Participant: Doug Porter
Organization: Bank of Montreal
Per cent change in real GDP:
2008: 1.4
2009: 0.2
2010: 2.1
2011-2013 Average Annual: 2.5

Participant: Avery Shenfeld
Organization: CIBC
Per cent change in real GDP:
2008: 1.5
2009: 1.5
2010: 2.0
2011-2013 Average Annual: 2.8

Participant: Ernie Stokes
Organization: Stokes Economic Consulting
Per cent change in real GDP:
2008: 1.6
2009: 0.9
2010: 3.8
2011-2013 Average Annual: 2.6

Participant: Derek Burleton
Organization: TD Bank
Per cent change in real GDP:
2008: 1.3
2009: -0.2
2010: 3.6
2011-2013 Average Annual: 2.5

Participant: Mary Webb
Organization: Scotiabank
Per cent change in real GDP:
2008: 1.5
2009: 0.2
2010: 2.8
2011-2013 Average Annual: 2.5

Participant: Paul Ferley
Organization: RBC Financial Group
Per cent change in real GDP:
2008: 0.8
2009: 0.6
2010: 3.5
2011-2013 Average Annual: 2.5

Participant: Dale Orr
Organization: Global Insight
Per cent change in real GDP:
2008: 1.5
2009: 0.7
2010: 2.7
2011-2013 Average Annual: 2.8

Participant: Helmut Pastrick
Organization: Central 1 Credit Union
Per cent change in real GDP:
2008: 1.2
2009: 0.0
2010: 2.1
2011-2013 Average Annual: 2.9

Participant: David Baxter
Organization: Urban Futures Institute
Per cent change in real GDP:
2008: 1.5
2009: 0.2
2010: 1.5
2011-2013 Average Annual: 2.8

Participant: Carl Sonnen
Organization: Informetrica
Per cent change in real GDP:
2008: 1.1
2009: 1.3
2010: 3.2
2011-2013 Average Annual: 2.0

Average:
Per cent change in real GDP:
2008: 1.3
2009: 0.6
2010: 2.7
2011-2013 Average Annual: 2.6

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