The Treasury this morning released a report to the Minister of Finance offering several scenarios for how the economy might develop over the next few years. Before getting into the substance, there are a few points worth noting:
- these are not forecasts, but are best seen as conditional projections (mostly on unchanged macro policy – fiscal and monetary – and then various different assumptions about the extent of the (a) the policy restrictions, and (b) the state of the world economy,
- note that “unchanged fiscal policy” here includes the fact that the current wage subsidy scheme expires in June (in fact, much of what will be paid has already been paid, since it is a lump-sum scheme from government to firms),
- two of the scenarios allow for some fairly significant additional government spending,
- none of the scenarios seems to explore different assumptions about the how the private sector responds (all…
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Utopia, you are standing in it! 
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