Ottawa should be able to maintain medium-term debt sustainability and achieve its goal of lowering its debt load over the next few years, according to a report by the Parliamentary Budget Officer (PBO).
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The PBO, Yves Giroux, thus examined the sustainability of the debt of the federal budget unveiled last April. To do so, he used past experience to examine the likelihood of debt falling relative to gross domestic product (GDP) and how quickly.
According to the report, there is thus a 65% probability that this ratio will be lower in 2026-2027 than its value of 63.7% observed in 2021-2022. The level of the debt could therefore have a certain stability despite the economic shocks to be expected.
The Trudeau government should also be able to reduce its debt and achieve its deficit target of 1% of GDP.
“However, our results also suggest that the gross debt-to-GDP ratio is unlikely to return to its pre-pandemic 2019-20 level by the end of the medium-term planning horizon, in 2026-2027. “, all the same specified Mr. Giroux.
Remember that according to the last budget, the federal debt will represent 45% of GDP for the current fiscal year.
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