Calgary

Alberta should lead in GDP growth for next 2 years, TD forecasts

Alberta's economy has been in a tailspin since the 2014 crash in oil prices and further slammed by the Fort McMurray fires earlier this year, but a major Canadian bank predicts the province will actually lead the country in GDP growth in both 2017 and 2018.

'The good news for Alberta is that the worst is in the rear-view mirror,' says 2017-18 outlook

At nine per cent, Calgary's unemployment rate in September led all major cities in Canada, but TD Economics says the economy should grow in 2017 and 2018. (Evelyne Asselin/CBC)

Alberta's economy — in a tailspin since the 2014 crash in oil prices and the Fort McMurray fires earlier this year — will lead the country in GDP growth in 2017 and 2018, Toronto-Dominion Bank predicts.

"The good news for Alberta is that the worst is in the rear-view mirror," says a new report from TD Economics.

"With oil production having been restored by July, and reconstruction efforts having already begun, the second half of the year promises to be better."

The report predicts that oil-related investments will "stabilize" next year with a gradual increase in oil prices to a point above $50 US a barrel.

Alberta's GDP growth should top two per cent in 2017 and 2018, according to the forecast, which would be the highest of all provinces in both years.

TD Economics says Alberta will lead the country in GDP growth in 2017 and 2018, with rates above two per cent each year. (TD Economics/Screenshot)

But even that level of growth would mark only "a muted rebound compared to past experiences, and will barely bring the level of GDP back to that recorded in 2014," the report cautions.

"While certainly an improvement, the pace of growth is only about half that recorded coming out of the previous recession and economic activity will still fall short of 2014 levels," it says.

The country-leading growth pace for Alberta is also attributable to slowdowns foreseen for other provinces.

The report anticipates that cooling housing markets in B.C. and Ontario will take some steam out those economies, while the "several headwinds" facing Newfoundland and Labrador will delay the recovery in that oil-producing province.

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