Yukon's 2014 economic forecast dimmer than expected

The Yukon Government released its 2014 economic forecast yesterday, which predicts less growth that what the government expected last fall.

“Forecasts change as your assumptions change,” says government economist Derrick Hynes

Last fall, the Yukon Government predicted the territory’s GDP would grow by nearly 9 per cent.

The same government’s 2014 economic forecast released yesterday predicts growth of around 3 per cent.

Government economist Derrick Hynes says there’s a distinction between a prediction and a forecast.

“Forecasts change as your assumptions change,” he says.

Hynes also blames mineral prices.

"Certainly our economy is small, it's reactive to changes that occur at the global level,  so when we see these things happen, we certainly do see it trickle through our economy."   

Hynes gives the example of the Bellekeno mine, which announced a shutdown last winter due to low silver prices, and won’t be coming back until 2015 at the earliest.

He also pointed to Minto, which laid off workers in January.

NDP critical of early predictions

Yukon NDP leader Liz Hanson says the discrepancy is due to faulty math, or an effort to mislead the public.

“It was very clear that [9 per cent growth] wasn't possible,” she says. “One only had to look about the territory, not even beyond the border in terms of world commodity prices, but just look at what the reality was."

Hanson says the new figures make more sense.

“The forecast is in fact more realistic than what we've heard from the Yukon Party government over the last couple years. My sense is they've finally taken off their rose-coloured glasses and are releasing a more reasonable estimate for 2014.”

Exploration to drop, tourism to rise

Mineral exploration spending is expected to drop further this year.

In 2013, it was the lowest it had been in years.

On the upside, tourism is expected to increase slightly.

Construction spending is also expected to rise in 2014, along with retail sales.

And the forecast also says unemployment may go up a bit as the Yukon population grows faster than the economy.


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