The long goodbye
Inflation and interest rates will continue to weigh on Alberta’s economy in 2023
By Rob Roach, ATB Economics 30 November 2022 1 min read
Alberta is not experiencing an economic boom, but the positive prospects of our oil and gas sector are providing a significant boost that will continue into 2023.
Released this morning, ATB Financial’s most recent forecast pegs Alberta’s real GDP growth at 5.0% in 2022 (unchanged from our August forecast) and 2.8% in 2023 (down from 3.0% in August).
Meanwhile, the national economy is forecast to experience a near-recession next year with negative growth during the first two quarters.
Despite the ongoing growth in Alberta, elevated inflation, higher interest rates, slower global growth, and geopolitical strife will continue to cause problems for Albertans in 2023.
Inflation is projected to come down over time, but it will stay elevated throughout 2023.
At the same time, the higher borrowing costs put in motion by the Bank of Canada to combat inflation are unlikely to start coming down until 2024.
In addition to the boost from our oil and gas and agriculture sectors, an influx of people into Alberta will help cushion the overall impact of these blows.
The strong in-migration is also expected to benefit Alberta’s labour market, which has been grappling with labour shortages.
Against this backdrop, our forecast is for the provincial unemployment rate to average 5.9% next year or about a full percentage point lower than the pre-pandemic average of 7.0% set in 2019.
Answer to the previous trivia question: There are about 494 dairy producers in Alberta.
Today’s trivia question: Who was the first premier of Alberta?