The forecast, released this morning, is for real gross domestic product growth of 3.7 per cent in 2014 and 3.6 per cent next year. That follows similar rates of growth over the last two years. Since the end of the 2009 recession—during which the province’s economy suffered a sharp 4.2 per cent contraction—Alberta’s economy has outperformed most every other part of the country.
With growth rates in the range of three to four per cent annually, Alberta is enjoying the “Goldilocks economy” – growth that’s neither too hot nor too cold. Things get out of balance when the economy starts expanding too far above four per cent: it puts a strain on labour markets, pushes wages up too quickly, and makes the housing and rental markets a challenge for many people to manage.
The forecast is based on assumptions of West Texas Intermediate oil averaging $98/barrel (U.S.) and natural gas averaging $4.49 mmBtu (U.S.). Both are currently trading below these levels, but they started the year at higher rates. As well, the Canadian dollar is currently softer than the forecast assumption of $0.91, which will offset the lower U.S. dollar energy prices.
For the full Alberta Economic Outlook for the fourth quarter of 2014, please click here: