Landing the plane: Alberta's economy heading into 2025

ATB Financial Quarterly Economic Outlook

EDMONTON, AB, Oct. 3, 2024 /CNW/ - The tide has turned in the battle against inflation, setting the stage for a softish landing. The Canadian economy, after narrowly avoiding a technical recession late last year, is projected to grow by 1.2 per cent this year and accelerate to 2.0 per cent in 2025 as the Bank of Canada continues to cut its policy rate. Some challenges will remain even as interest rates normalise, including sluggish labour productivity and stretched housing affordability.

Alberta's economy has also been navigating the impacts of inflation, along with a prolonged adjustment to lower oil and gas investment over the past decade. But the economy is showing some promising signs in 2025. Increased market access, more investment in downstream energy projects, and a population-driven jump in new home construction is expected to keep Alberta's GDP growth rate above the national average next year.

Households will continue to feel the lingering effects of past interest rate hikes and inflation, constraining growth in consumer spending. In addition, a rapidly expanding labour force will keep the unemployment rate elevated in the near term, before easing next year.

ATB Financial's latest economic outlook sees Alberta as among the growth leaders in Canada. Alberta's real GDP is forecast to expand by 2.5 per cent in 2024 and improve further to 2.8 per cent in 2025, significantly outpacing the national economy. 

To account for the continued presence of elevated global risks, ATB Financial continues to incorporate high and low scenarios into its forecast, in addition to its base projection.

"Alberta's economy is expected to gather more momentum in 2025, driven by enhanced market access for energy, residential construction activity, and growth in emerging industries," said ATB Financial's Chief Economist, Mark Parsons. "But the battle against inflation has left a toll and geopolitical risks are elevated, which should keep consumers and businesses cautious."

About ATB Financial

With $62.0 billion in assets, ATB Financial is a leading financial institution that started in Alberta with the focus of putting people first. Our success comes from our more than 5,000 team members who love to deliver exceptional experiences to over 820,000 clients across our Personal and Business Banking, ATB Wealth Management and ATB Capital Markets businesses. ATB provides expert advice, services and products through our many branches and agencies, our 24-hour Client Care Centre, four entrepreneur centres and our digital banking options. ATB powers possibilities for our clients, communities and beyond. More information about ATB can be found at atb.com.

General Disclosure

ATB Financial's Economic Outlook is intended for general information and educational purposes only and should not be considered specific legal, financial, tax or other professional advice or recommendations. Information presented is believed to be reliable and up-to-date but it is not guaranteed to be accurate or a complete analysis of the subjects discussed. All expressions of opinion reflect the judgement of the authors as of the date of publication and are subject to change. The actual outcome may be materially different. ATB Financial and any of its affiliates are not liable for any errors or omissions in the information, analysis or views contained in this report, or for any loss or damage suffered. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by ATB Financial or any of its affiliates and related entities.

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SOURCE ATB Financial