OSOYOOS TIMES-December 9, 2009
Last week, the B.C. Finance Ministry issued a media release with the headline “B.C. economy expected to stabilize in 2010.”
This optimistic statement was born out of a projection from the province’s Economic Forecast Council, which is expecting British Columbia’s economy to grow by 2.9 per cent in the new year.
That’s up from the 2.5-per-cent growth projection made in September when the government presented its budget update.
The main reasons for this more hopeful outlook, according to the council, are increased housing starts and improvements in commodities markets and the mineral resources sector.
The 14-member council is made up of bankers and representatives of economic consulting firms or other financial institutions and all of their individual forecasts for B.C.’s economic future are fairly rosy considering how rough the last year has been.
It would be hard to find anyone who wouldn’t want these projections to become reality.
And the sooner the better.
If we are on the path to better days ahead when it comes to the economy and employment, then such news should be more than welcome.
But one can’t help think of another optimistic projection made earlier this year that turned out to be way off the mark.
In February, while the global economy had already been tanking for more than five months, the provincial government announced that B.C. would be facing a deficit in 2009/2010 of just under $500 million.
During the spring election, the government continued to pledge that the maximum deficit for the year would be $495 million.
When the budget was updated in September, however, Finance Minister Colin Hansen announced that the forecast deficit for the province would actually be more than five-and-a-half times that amount.
So, as much as we’d like to, it’s a little hard to swallow optimistic economic projections right now.
Sure, everyone needs hints of optimism and a little good news as often as possible.
It’s hard not to wonder, however, if the council’s current projection for economic growth may be premature.
Yes, with Christmas around the corner, it’s the perfect time of year to try to get people’s hopes up a little, perhaps in an attempt to jumpstart the economy and increase spending in the retail sector.
But if this turns out to be another false start to the forecasted economic turnaround so many are looking forward to and counting on, some may take it as a shot to the gut if the situation doesn’t improve as projected.
In its forecast, the council itself has recognized that there are still many challenges ahead and there is still a long way to go before full economic recovery.
Who knows what issues may arise in the next few months that could have positive or negative effects on the province’s finances.
So how about this: let’s allow the economy to get back on its feet and then we can get all optimistic and happy, rather than putting all our hopes on projections that may or may not come true.
