CBC, CJOB, Sun: Manitoba’s debt outlook downgraded to ‘negative’
Michael Benarroch, Dean of the Asper School of Business, was busy recently giving context to a recent decision by Moody’s Investors Service that saw it downgraded its outlook for Manitoba’s debt rating from stable to negative. The firm said the province would have difficulty balancing a budget by 2016-17 and has a risk of increasing its debt.
As Benarroch told the Winnipeg Sun:
“I think it means that the financial picture in Manitoba isn’t quite as strong as we had hoped it would be,” he said. “The economy continues to be weaker than expected and there’s some spending pressures on the province. The flood hasn’t helped, and health and social services remain growing well above rates of inflation … and economic growth.”
Benarroch suggests a substantial boost in economic growth — “which is unlikely to happen,” he said — or a lid on governmental spending can turn things in a more positive direction.
“The problem with that is it’s likely to hurt economic growth, too, if they do that,” he said. “They’re really in a tight position.”