Kevin Milligan

UBC Vancouver School of Economics

3/24/2015
Please email me with any suggestions for improvements: kevin.milligan@ubc.ca

This spreadsheet compares the economic forecasts for 2015 and 2016 from TD Bank and the 2014 Fa
There are three steps
1. Find difference between TD and FFU assumptions.
2. Use fiscal sensitivities from FFU to map these assumption changes into budget balance changes.
3. Add up and compare new budget balance to old budget balance.
TD Quarterly Economic Forecast, http://www.td.com/document/PDF/economics/qef/qefmar2015_canad
Fall Fiscal update, Nov 12, 2014 http://www.budget.gc.ca/efp-peb/2014/pub/toc-tdm-eng.html
2015 Growth Projections
2014 Fall Fiscal UpdateTD Economics
Assumption 3/24/2015 Difference
Nominal GDP 3.65% 1.30%
Real GDP 2.21% 1.90% 0.31%
GDP inflation 1.44% -0.60% 2.04%
Interest rates--10 year rate 3.00% 1.65% 1.35%

2016 Growth Projections

2014 Fall Fiscal UpdateTD Economics
Assumption 3/24/2015 Difference
Nominal GDP 4.49% 4.90%
Real GDP 2.45% 2.20% 0.25%
GDP inflation 2.04% 2.70% -0.66%
Interest rates--10 year rate 3.60% 2.24% 1.36%

Overall Budget Impact

Impact on budget balances given change in 2015 assumptions

Impact on budget balances given change in 2016 assumptions
Overall impact of changes in 2015 and 2016 assumptions

Translate this to fiscal year basis, pro-rated

Overall forecast change
Fall Fiscal Update Projected Balance
Revised Budget Balance Forecast
Bank and the 2014 Fall Fiscal Update (FFU)

et balance changes.

qef/qefmar2015_canada.pdf
c-tdm-eng.html
Impact on Budget Balance Impact on budget of Economic Shocks, in $B's
Year 1 Year 2 Source: Table 3.6-3.8 of Fall Fiscal Update
2015 2016 http://www.budget.gc.ca/efp-peb/2014/pub/chap03-eng.ht
Year 1 Year 2 Year 5
-1.33 -1.52 -4.3 -4.9 -5.9
-4.69 -4.08 -2.3 -2.0 -2.0
0.14 1.22 -0.1 -0.9 -1.6

Impact on Budget Balance

Year 1 Year 2
2016 2017

-1.08 -1.22
1.52 1.32
0.14 1.23

2015 2016 2017

-6.03 -5.60
0.44 0.00
-6.03 -5.16 0.00

2015-16 2016-17
-5.81 -3.87
1.90 4.30
-3.91 0.43
hocks, in $B's

2014/pub/chap03-eng.html