Nova Scotia Issues Budget Forecast Update
Nova Scotia is on track to produce a budget surplus for 2008-2009.
"Results were good for the first three quarters of the year despite world economic conditions," said Finance Minister Michael Baker today, Dec. 19. "However, with some revenues softening, government has made tough choices to meet our commitment to maintain a surplus and reduce debt."
Mr. Baker said while the budget results are positive for the year so far, changing economic factors may affect future results.
The province is forecasting a 2008-2009 budget surplus of $212.9 million, $23.3 million higher than the budget estimate in April.
Total revenues, including net income from government business enterprises, are forecast to be $8.5 billion, $14.8 million more than budgeted. This is primarily due to the federal crown share adjustment payment offset by declines in income taxes and petroleum royalties.
Government asked all departments to find savings in their budgets as part of an expenditure management plan for 2008-2009. Spending was reduced by $43.6 million, which offset higher expenses and resulted in an $11.6 million decrease in departmental spending.
Total expenses are forecast to be $8.3 billion, $15.9 million lower than budget. Increases in the pension valuation adjustment and the expanded Heating Assistance Rebate Program and other energy efficiency programs were offset by expenditure management and lower debt servicing costs.
"We have worked hard to get the results we have to date," said Mr. Baker. "However, we recognize that the months and years ahead will pose significant challenges for all governments."
The real Gross Domestic Product growth rate for 2008 is now forecast at 1.4 per cent compared to a projected rate of 1.7 per cent at budget time.
In light of current global economic conditions, the province is preparing a plan to stimulate the economy. Details will be finalized after the federal budget.
A copy of the forecast update is on the Department of Finance website at www.gov.ns.ca/finance .