Running up hill: Alberta’s economy will continue to grow despite global challenges
By ATB Financial 8 September 2022 2 min read
Calgary—Economies around the world are facing the same set of challenges including tighter monetary policy, the war in Ukraine, high inflation, skittish financial markets and the ongoing pandemic. Despite the potential for economic contraction at home and abroad, ATB Financial’s latest quarterly Economic Outlook forecasts Alberta’s economy will continue to grow in 2023.
Boosted by strong commodity prices, Alberta’s economy is forecast to grow 5.0% in 2022 and 3.0% next year and will be one of the top performers in the country this year.
ATB Financial's recent Economic Outlook outlines the key factors influencing Alberta’s current economic trajectory:
Russia’s invasion of Ukraine remains a significant constraint on the global economy through supply chain disruptions, elevated commodity prices, and anxious financial markets. Alberta will continue to feel these impacts but is expected to move forward due to robust activity in its agricultural and natural resource sectors.
High commodity prices combined with the sudden release of demand built up during the pandemic, sanctions on Russia, and persistent supply chain issues have led to significant increases in inflation rates. While higher commodity prices have a positive impact on the Alberta economy, they also mean consumers and businesses are paying more.
To address inflation, the Bank of Canada has raised its trend-setting policy interest rate and is expected to keep doing so until inflation returns to its target range. Higher borrowing costs will dampen economic activity and could even trigger a recession at the national level.
"Strong commodity prices are providing an economic boost in our province. At the same time, high inflation and rising interest rates are making things tough for a lot of families and businesses," says ATB Financial Deputy Chief Economist Rob Roach. "Looking forward, the momentum Alberta has going into 2023 will help our economy weather the economic storm created by the invasion, inflation, and interest rates.
About ATB Financial
With $59.0 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 815,000 clients through our many branches and agencies, our 24-hour Client Care Centre, four entrepreneur centres, and our digital banking options.
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ATB Financial’s Economic Outlook is intended for general information and educational purposes only and should not be considered specific legal, financial, tax or other professional advice or recommendations. Information presented is believed to be reliable and up-to-date but it is not guaranteed to be accurate or a complete analysis of the subjects discussed. All expressions of opinion reflect the judgement of the authors as of the date of publication and are subject to change. The actual outcome may be materially different. ATB Financial and any of its affiliates are not liable for any errors or omissions in the information, analysis or views contained in this report, or for any loss or damage suffered. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by ATB Financial or any of its affiliates and related entities.