Overview
Alberta’s economic growth is set to pick up this year, but will lag behind the exceptional increase in the province’s population. Expanding pipeline capacity and stronger-than-expected oil prices are boosting revenues and activity in the energy sector, while output from other sectors has been slow to gain momentum. Industrial investment is gaining traction and intentions have been strong. Residential construction investment is benefitting from exceptionally strong population growth, but that surge in population is also putting pressure on Alberta’s tight housing and rental markets. This had led to accelerating shelter costs, which are propping up headline inflation.
Alberta’s real gross domestic product (GDP) is now expected to rise 3.3% in 2024, up 0.4 percentage points from Budget 2024, but the exceptional pace of population growth means Alberta is falling behind in per-capita GDP. Consumer spending in the province remains anemic and continues to be the biggest drag on growth. Easing interest rates are expected to provide some relief in the second half of the year.
Resources
- Read the 2024-25 first-quarter economic update.
Record population growth expected
Alberta’s population is expected to grow at a much faster pace than anticipated at budget. In the first quarter of 2024, Alberta’s population increased by 200,000 (or 4.4%) from a year ago. Population growth is now forecast at 4.6% in the 2024 census year, up significantly from the budget forecast of 3.7% and higher than 4.1% seen in 2023.
While the economy is expanding, Alberta’s labour and housing markets are struggling to accommodate the rapid increase in population. Employment is on track to grow at a solid pace of 3% this year, but the unemployment rate is expected to climb to 7% with more people looking for work.
Table 1. Energy price and currency assumptions
| Fiscal year | 2023-24 Actual | 2024-25 Budget | 2024-25 Q1 Forecast |
|---|---|---|---|
| WTI oil price (US$/barrel) | 78.00 | 74.00 | 76.50 |
| Light heavy differential (US$/barrel) | 17.30 | 16.00 | 14.40 |
| Exchange rate (US cents/ Cdn$) | 74.20 | 75.90 | 73.70 |
Table 2. Economic assumptions
| Calendar year | 2023 Actual | 2024 Q1 Forecast | 2025 Q1 Forecast |
|---|---|---|---|
| Economic growth (% change in real GDP) | 1.8 | 3.3 | 3.5 |
| Employment (% change) | 3.6 | 3.0 | 3.1 |
| Unemployment rate (%) | 5.9 | 7.0 | 6.8 |
More budget information
Find out what Budget 2024 means for you.
Revenue projections from taxes, transfers, investment income and resources.
Budget 2024 invests in the infrastructure families and communities need.
Summary of government spending according to Budget 2024.