Overview
The Alberta economy continues to be resilient, but interest rate increases, high prices and slower global economic growth are creating headwinds. Alberta’s real gross domestic product (GDP) is forecast to grow 2.8% this year, a moderation from last year’s exceptionally strong pace of 5.0%. This is in line with budget expectations but slightly lower than the first quarter.
Resources
- Read the 2023-24 Mid-year Fiscal Update and Economic Statement (PDF, 1.5 MB).
Oil and gas leading the way
Growth is being led by the oil and gas sector, where solid energy prices and the anticipated increase in Alberta’s takeaway capacity next year are driving spending and production. Business investment intentions are strong and employment prospects remain positive in the province. Homebuilding activity took off in the third quarter, suggesting some relief is coming for Alberta’s tight housing market. However, the impact of higher interest rates and elevated prices is working its way through the economy.
Consumer confidence has pulled back sharply, leading households to curtail spending. Consumers and businesses also continue to grapple with rising costs. Slower global demand is dampening non-energy exports and contributing to the volatility in oil prices.
Table 1. Energy price and currency assumptions
| Fiscal year | 2022-23 Actual | 2023-24 Budget | 2023-24 Mid-year Forecast | 2024-25 Forecast | 2025-26 Forecast |
|---|---|---|---|---|---|
| WTI oil price (US$/barrel) | 89.69 | 79.00 | 79.00 | 76.00 | 73.50 |
| Light heavy differential (US$/barrel) | 20.77 | 19.50 | 17.00 | 15.30 | 14.70 |
| Exchange rate (US cents/ Cdn$) | 75.60 | 76.20 | 74.10 | 76.40 | 78.60 |
Table 2. Economic assumptions
| Calendar year | 2022 Actual | 2023 Mid-year Forecast | 2024 Forecast | 2025 Forecast | 2026 Forecast |
|---|---|---|---|---|---|
| Economic growth (% change in real GDP) | 5.0 | 2.8 | 2.6 | 3.0 | 2.8 |
| Employment (% change) | 5.2 | 3.3 | 2.5 | 2.5 | 2.2 |
| Unemployment rate (%) | 5.8 | 5.9 | 6.2 | 6.1 | 5.9 |
More budget information
Find out what Budget 2023 means for you.
Revenue projections from taxes, transfers, investment income and resources.
Budget 2023 invests in the infrastructure families and communities need.
Summary of government spending according to Budget 2023.