ATB Financial's latest Economic Outlook forecast for 2022 anticipates that, while a strong recovery in the oil and gas sector and momentum in other areas are propelling the Alberta economy forward, the province will continue to face challenges due to the ongoing pandemic
Alberta's real GDP is expected to rebound by 6.3 per cent in 2021 followed by growth of four per cent in 2022 and 2.5 per cent in 2023. While the province is moving in the right direction, the annual provincial output will only meet 2019's output level by 2022 and the annual GDP per capita will take until 2023 to reach the pre-pandemic level.
Alberta likely to post highest growth rate of all the provinces
"Alberta lost the most economic ground of any province in 2020,'' said Todd Hirsch, vice president and chief economist at ATB Financial. "Although Alberta will likely post the highest rate of growth among the provinces in 2021, most of the other provinces will reach, and start growing beyond their pre-pandemic level of output sooner than Alberta."
Alberta's recovery has been uneven with sectors such as financial services, cannabis and retail performing better than before the pandemic while other areas like restaurants and bars, tourism and the arts, have shown a decline in output. The unemployment rate sits at 7.6 per cent as of October 2021 and is expected to remain elevated, averaging 7.9 per cent in 2022 before easing to 6.8 per cent in 2023.
Inflation rate expected to fall to three per cent next year
The pandemic has created unusually high levels of uncertainty and the forecast assumes higher-than-normal inflation and rising interest rates to prevent further price increases. Alberta’s inflation rate has been above 4 per cent since August with rates expected to stay around this level for the next few months and then falling to an average of 3% in 2022 and 2.5% in 2023.
High oil and gas prices are providing a positive boost to the province but the Economic Outlook states they are unlikely to create an economic boom. A growing tech sector, new investment in petrochemical production capacity, a resilient housing sector and the potential development of clean energy options such as hydrogen all bode well for future growth in Alberta, states the report.
