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No BC deficit or recession despite uncertainty: Hansen

Finance Minister Colin Hansen said today he believes B.C. will avoid a recession and the provincial government won’t run a deficit, but admitted that accurate predictions are difficult to make in today's economic climate.

Hansen said the province has seen its projected revenues drop “dramatically” but said he was confident the provincial economy will see modest but steady growth rates over the coming fiscal year thanks largely to the natural gas industry. He added that current economic figures will be released Monday. .

“British Columbia, according to all the leading economists, can still anticipate positive economic growth through this very difficult time,” Hansen said.

But questioned on his confidence in the accuracy of the government’s economic forecasters, Hansen said the volatile global economy makes it hard to predict the future. “It’s been a very difficult time to be an economist and a forecaster in North America,” he said. “It’s fair to say that some of the forecasts given six months ago are now being dramatically revised.”

Bernie Magnan, chief economist with the Vancouver Board of Trade, said the province will likely "skirt close" to a recession with growth between 0.5 and 1.5 per cent GDP over the next fiscal year.

“Any prediction that an economist makes can be wrong,” he said. “But you go with the information that you have.”

Canadian Centre for Policy Alternatives researcher Iglika Ivanova said declines in consumer spending, investment and real estate values mean a provincial recession is likely.

But she added the effects in B.C. won’t be as pronounced as they will be in Ontario, where a collapsing manufacturing industry could wreak economic havoc.

Whether B.C.’s economy is able to post growth over the next year will most likely depend on factors beyond the province’s control such as U.S. demand for forestry products, she said.

“It’s a difficult time to make accurate predictions because things are changing so fast,” Ivanova said. “There’s a lot of things up in the air.”

Geoff Dembicki is a staff reporter for the Hook.

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