Overview
Alberta is well positioned to face potential economic challenges. Following 2 years of robust post-pandemic recovery, Alberta’s real gross domestic product (GDP) is expected to expand 2.8% this year and lead the country. Economic growth is set to moderate after Alberta's economy fully recovered from the COVID-19 downturn and surpassed the 2014 peak last year.
Resources
Medium-term prospects remain solid
Alberta’s oil and gas sector is expected to take the lead in 2023. Solid energy prices and strong cash flows from 2022 will support drilling activity, production and investment in the sector.
Meanwhile, an upsurge in population growth is expected to provide relief to Alberta’s tight labour market and buoy job gains. However, rising borrowing costs and elevated prices will continue to dampen consumer spending and non-energy business investment.
Over the medium term, economic growth will pick up and become more broad-based. Real GDP is forecast to rise to 3.0% in 2024 and average 2.9% between 2025 and 2026.
Attracting investment
Alberta’s competitive taxes, regulatory environment and access to abundant and low-cost natural resources will continue to encourage investment in the province. Construction activity will also get a boost from higher capital spending by the provincial government.
Consumer spending and residential construction activity are expected to gain traction as inflation subsides further and interest rates come down. A pickup in global growth should fuel stronger gains in manufacturing and services exports.
Solid fundamentals – including strong population growth, a relatively young population, a lower cost of living and high wages – will support Alberta’s continued expansion.
Table 1. Energy price and currency assumptions
| Fiscal year | 2023-24 Forecast |
2024-25 Forecast |
2025-26 Forecast |
|---|---|---|---|
| WTI oil price (US$/barrel) |
79.00 | 76.00 | 73.50 |
| Light heavy differential (US$/barrel) |
19.50 | 16.80 | 16.40 |
| Exchange rate (US cents/ Cdn$) |
76.20 | 78.20 | 79.50 |
Table 2. Economic assumptions
| Calendar year | 2023 Forecast |
2024 Forecast |
2025 Forecast |
2026 Forecast |
|---|---|---|---|---|
| Economic growth (% change in real GDP) |
2.8 | 3.0 | 2.9 | 2.8 |
| Employment (% change) |
2.3 | 2.7 | 2.5 | 2.3 |
| Unemployment rate (%) | 6.4 | 6.3 | 6.1 | 5.7 |
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.