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Yukon's latest economic forecast: The calm before the storm?

Yukon's 2016 GDP is forecast to grow after three years of contraction, while 2017 will see GDP plummet.

Minto mine accounts for expected surge in 2016's GDP, before further contraction in 2017

Capstone Mining's Minto mine. The mine is expected to shut down next spring. (Capstone Mining Corp.)

Yukon's GDP shrank for the third year in a row in 2015, according to the territorial government's semi-annual economic outlook.

Statistics Canada preliminary estimates say Yukon's GDP last year sat at $2.177 billion, down 3.8 per cent from the previous year.

The forecast says that's due to "lower mineral production, the result of weak mineral prices and an ongoing slowdown in the global mining industry."

Unemployment also rose last year in Yukon, to 6.3 per cent.

But retail sales were up in 2015 over the year before, at over $692 million.

GDP will grow in 2016 after three years of contraction 

Meanwhile, Yukon's GDP is expected to experience a bump up this year, at growth rates of 2.8 per cent.

The forecast attributes that surge to activity at Capstone's Minto mine, with stripping of the north pit expected this year.

The economic outlook predicts a good year for tourism in Yukon. (travelyukon.com)

Retail sales are also expected to post "modest growth" this year, and the report goes on to say that all indicators point to a positive year for tourism.

But unemployment is also expected to rise this year, to 6.6 per cent.

Gloomy forecast for 2017

The picture also takes on a decidedly gloomy cast for 2017, when GDP is expected to contract by 5.7 per cent.

That, too, is attributed directly to the evaporating mining industry. Minto, the last operating mine in the Yukon, is expected to shut down next year.

However, the unemployment rate is forecast to drop very slightly in 2017, to 6.3 per cent.

And retail sales are expected to grow to over $700 million.

On a global scale, the International Monetary Fund is projecting stronger global growth, of 3.5 per cent.

Yukon's economic forecast could be troublesome for the governing Yukon Party, as it hits the campaign trail in anticipation of this year's territorial election.

The government has held economic performance up as one of its central planks.


     

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