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Albertans in for Another Tough Year: ATB’s Economic Outlook

Saturday 23 January, 2016 at 4:26 pm / 0 comment

Written by ATB Financial economists Todd Hirsch and Nick Ford, The Owl focuses on the day’s top economic news. Whether it’s the latest on wages, inflation, the oil and gas industry or the other drivers of our province, it’s in The Owl.

Released today, ATB Financial’s first quarterly Economic Outlook of 2016 is forecasting another rocky year for Alberta’s economy with real GDP shrinking by 0.5 per cent. While negative, that’s still less than last year’s real GDP contraction of an estimated one per cent (final numbers are not yet in).

While there is ongoing downward pressure on oil prices, there is some light at the end of the price slump tunnel. Any number of scenarios could come to pass, but we believe the most likely scenario is for oil prices to hover close to $US 30-40 for the first half of the year, with modest recovery to $US 50-55 by year’s end. This would require global demand to hold up, some pullback in OPEC supply (particularly in Venezuela and Nigeria) and less non-OPEC oil coming onto the market due to the drop of new investment in 2014 and 2015.

Other sources of optimism include agriculture, forestry and tourism—the province’s other major industries—which continue to perform well. The weak Canadian dollar will provide some cushion for Alberta’s energy exporters and will encourage more U.S. tourism to the province.

The stormy economic weather is not over and unemployment will continue to hurt many Albertans. If oil prices recover as forecasted, we will see growth return later in the year setting us up for much better 2017.

Read the full ATB Financial Alberta Economic Outlook and watch Todd summarize the report in this video.

2016 Alberta Real GOP Growth


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