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A mix of sun and cloud: ATB Financial’s economic forecast for Alberta’s recovering economy

By ATB Financial 10 June 2021 2 min read

Calgary—ATB Financial’s newest Alberta Economic Outlook presents a mixed forecast for our province as we emerge from the global pandemic.

Alberta is poised for an estimated 5% growth in our province’s real GDP this year — up from ATB’s previous forecast of 4.1%. The effects of the global COVID-19 pandemic and plummeting oil prices will continue to be felt and it will still take until 2023 for Alberta to regain the ground it has lost.

“Alberta was hit harder than the rest of the country by the one-two punch of the pandemic and the oil price crash so we have more ground to recover,” said Todd Hirsch, vice president and chief economist at ATB Financial. “If people continue to get vaccinated, the economy is able to gradually reopen and OPEC continues to keep a lid on oil supply, Alberta’s recovery should stay on track.”

On the sunny side of the forecast, higher-than-expected oil prices are helping to boost Alberta’s economic fortunes, repairing some of the damage from transportation bottlenecks, the oil price wars between Russia and Saudi Arabia and the drop in demand during the pandemic. Household savings in Canada have also jumped from 1.3% of disposable income in 2019 to almost 15% in 2020 — an average of $5,574 per Canadian. At the same time, retail sales in Alberta have bounced back and are well above pre-pandemic levels.

On the cloudy side, the economic contraction in 2020 was higher than forecasted — 8.2% instead of 7.1%. Even with the accelerating vaccine rollout and summer reopening plan, it’s unclear when international tourism will return to Alberta or whether some businesses will survive. Even as jobs return, unemployment is expected to stay relatively high as the number of job seekers will outpace the number of job vacancies.

"Alberta's energy sector has bounced back but ongoing constraints on growth mean we can't rely on it to generate another jobs boom," Hirsch said. "It will take time and effort to replace the foregone growth. But industries such as tech, renewable energy, clean energy tech, agrifoods and a broad array of entrepreneurial activity bodes well for Alberta's economic future.”

Read the complete ATB Financial Economic Outlook.

About ATB Financial

With $55.7 billion in assets, ATB Financial is an Alberta-built financial institution that is a catalyst for economic growth in our province. We got started in 1938 to help Albertans through tough economic times. Today, ATB Financial’s more than 5,000 team members love to deliver exceptional experiences to over 800,000 clients through our many branches and agencies, our 24-hour Client Care Centre, four entrepreneur centres, and our digital banking options. Everything we do is focused on how we can serve Albertans—from providing expert advice and supporting entrepreneurs to helping Albertans buy a home and grow their wealth.

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