The Alberta economy is slowly emerging from one of the worst downturns in its history, caused by the dual impacts of the COVID-19 pandemic and last year’s collapse in oil prices. Although Alberta’s economic prospects have improved since 2020, the outlook remains uncertain and depends on virus containment and an effective vaccine rollout.
Read the Budget 2021 Economic Outlook Chapter (PDF, 6.0 MB)
Economy to see partial rebound this year
Alberta’s economy has rebounded since hitting a low point in May 2020, with the Alberta Activity Index increasing by nearly 10%, led by a swift recovery in retail spending, housing and oil production. The province has recovered about three-quarters of the jobs lost between February 2020 and April 2020.
Despite the improvement, economic activity is still relatively weak and recovery will take time. A resurgence in COVID-19 cases and tighter public health measures in early 2021 continue to impact Alberta, Canada and the world.
The Alberta economy is expected to gain momentum in the second half of the year with a wider vaccine rollout. After contracting by an estimated 7.8% in 2020, real Gross Domestic Product (GDP) is forecast to partially rebound by 4.8% this year.
Over the medium term, real GDP growth is expected to average about 3.4% per year through 2024. While real GDP and employment are expected to reach 2019 levels next year, the full economic impact of the pandemic will be felt further into the future.
Table 1. Energy price and currency assumptions (finalized January 21, 2021)
|Fiscal year||2021-22 Forecast||2022-23 Forecast||2023-24 Forecast|
|WTI Oil Price (US$/Barrel)||46.00||55.00||56.50|
|Light Heavy Differential (US$/Barrel)||14.60||14.70||15.30|
Table 2. Economic assumptions (finalized January 21, 2021)
|Calendar Year||2021 Forecast||2022 Forecast||2023 Forecast||2024 Forecast|
(% change in Real GDP)
|Unemployment Rate (%)||9.9||8.4||7.3||6.3|
More budget information
Find out what Budget 2021 means for you.
Revenue projections from taxes, transfers, investment income and resources.
Budget 2021 invests in the infrastructure families and communities need.
Summary of government spending according to Budget 2021.