Overview
Alberta’s economy is forging ahead as headwinds from high interest rates and rising prices gradually fade. Growth in real gross domestic product (GDP) is forecast to accelerate to 2.9% this year after an estimated 2.5% increase in 2023.
Despite heightened uncertainty, business sentiment remains positive, which is driving investment intentions across many sectors. Alberta’s exceptional population growth is increasing demand for housing and supporting spending in the province, but the impact of high interest rates and prices continues to weigh on consumer sentiment. Easing interest rates in the second half of this year should provide some relief to consumers and businesses.
Resources
Broad-based expansion in Alberta’s economy
Real GDP growth is forecast to accelerate to 3.3% next year before moderating to an average of 2.7% in 2026 and 2027.
While exports will remain a key driver of growth, business investment will gain momentum and account for a greater share of the economy. Large-scale investments across many industries will not only increase Alberta’s productive capacity, but also help diversify and decarbonize the economy over the medium term. Meanwhile, growth in consumer spending and residential construction will be driven by a combination of lower interest rates, strengthening consumer sentiment and a robust labour market.
Solid fundamentals – including strong population growth, a relatively young population, favourable cost of living and high wages – will also support Alberta’s economic expansion.
Table 1. Energy price and currency assumptions
| Fiscal year | 2024-25 Forecast | 2025-26 Forecast | 2026-27 Forecast |
|---|---|---|---|
| WTI oil price (US$/barrel) | 74.00 | 74.00 | 74.00 |
| Light heavy differential (US$/barrel) | 16.00 | 14.90 | 13.60 |
| Exchange rate (US cents/ Cdn$) | 75.90 | 78.10 | 79.70 |
Table 2. Economic assumptions
| Calendar year | 2024 Forecast | 2025 Forecast | 2026 Forecast | 2027 Forecast |
|---|---|---|---|---|
| Economic growth (% change in real GDP) | 2.9 | 3.3 | 2.8 | 2.6 |
| Employment (% change) | 3.0 | 3.1 | 2.5 | 2.0 |
| Unemployment rate (%) | 6.5 | 6.0 | 5.8 | 5.6 |
More budget information
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Revenue projections from taxes, transfers, investment income and resources.
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Summary of government spending according to Budget 2024.