Canada says 2025/26 deficit was less than expected, trims growth forecasts

OTTAWA, April 28 (Reuters) - ‌The Canadian ​government ​on Tuesday said the 2025/26 budget deficit would be lower than estimated and trimmed ‌its growth forecasts for the next two fiscal ⁠years.

In a spring economic statement, the finance ministry said the ‌2025/26 deficit would be ‌C$66.9 billion, less than the C$78.3 billion shortfall predicted in the November 2025 budget.

The improved figures ​in part reflect measures to contain spending as well as increased revenues from the sale of ⁠crude oil, it said.

Real GDP growth in 2026 is seen at ​1.1% compared to the 1.2% forecast in November and in 2027 growth is put at ​1.9%, down from 2.0%. In ‌2028 growth is seen unchanged at 1.9% and staying at that level in ⁠2029, down from 2.0%.

The ministry left its deficit forecasts for the next four fiscal years virtually unchanged from ⁠November, with the 2026/27 shortfall seen at C$65.3 billion, 2027/28 ​at C$63.1 billion, 2028/29 at C$57.7 billion and 2029/30 at C$56.2 billion.

The finance ministry also said the federal debt-to-GDP ratio ‌in 2025/26 was 41.1%, compared to the 42.4% forecast in November. The ratio ‌is then predicted to increase to 41.5% in 2026/27, ⁠rising further to ‌41.8% in 2027/28 and ​41.9% in 2028/29.

(Reporting by David Ljunggren, editing by Promit Mukherjee)

((Reuters Ottawa bureau; [email protected]))

Keywords: CANADA ‌BUDGET/FORECASTS

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