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Province returns to economic forecasters despite past performance

The British Columbia government released the economic forecast numbers today that will be used to build March's provincial budget.

Last year, when the pre-election deficit of $495 million in Feb. ballooned to nearly $2.8 billion in Sept. after the election, both finance minister Colin Hansen and premier Gordon Campbell put part of the blame on the difficulty of predicting economic performance.*

“We have seen projections get worse than anticipated,” Hansen said a day ahead of presenting the Sept. budget. “Nobody had that crystal ball and the leading experts in the world didn't call this last 12 months with much accuracy.”

Hansen's observation was similar to ones made Aug. 25 by Campbell following the government's speech from the throne as reporters pressed him on what he knew when about the deteriorating economy.

“They're changing their projections all the time,” Campbell said. “They're projecting based on what's happened, not what's going to happen.

“For example, none of them actually projected we were going to have record real estate sales in July. You can't find me one that found that. None of them were projecting that the dollar was going to go up to over 90 cents at that period of time.” Nor had anyone foreseen the collapse in natural gas revenues, he said.

And here's what Campbell had to say on June 8 after swearing in his caucus: “Anyone that thinks they're going to rely on economic forecasts to determine what they're going to do is going to look back at the last year and say, 'That doesn't make very much sense.'”

Nevertheless, the news release presenting today's projections for economic growth until 2014 quoted Hansen saying he was “reassured” by the Economic Forecast Council's prediction of a stable 2010.

The 14 members of the council predicted, on average, 2.9 percent growth in 2010, 3.1 percent in 2011 and three percent growth from 2012-14.

The announcement notes that the council members submitted forecasts in Dec. and were given the opportunity to update them by Jan. 15. Eleven of the 14 members revised their forecasts.

* Sept. budget figure corrected.

Andrew MacLeod is The Tyee’s Legislative Bureau Chief in Victoria. Reach him here.

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