Alberta Central, the central banking facility, service bureau and trade association for Alberta’s credit unions, has published a 2022 Economic Outlook written by Chief Economist Charles St-Arnaud. In the Outlook, St-Arnaud provides insights at the global, national and provincial levels. While there are risks to the Outlook, overall, the future looks bright in Alberta thanks in part to a surge in oil revenues.
“One of the most important economic stories of 2021 for Alberta has been the sharp reversal of fortune for the oil and gas sector, with production values reaching all–time highs since mid–2021,” writes St-Arnaud. “It is expected the rebound in the oil and gas sector will be a powerful tailwind for the Alberta economy in 2022, supporting income, employment, investment and government revenues.”
The province’s economy is expected to grow by 4.2% in 2022, higher than the 3.8% that is expected for the rest of the country. The housing market is expected to remain strong in Alberta throughout 2022. While rate hikes are likely to slow the market in the second half of the year for Canada as a whole, housing affordability in Alberta does not depend on the low rates to the same extent as in other cities in Canada.
Employment recovery in Canada is the strongest since the 1980s, despite more significant job losses, and the recovery is expected to continue in 2022. But although the level of employment has recovered, there is still some slack in the labour market and labour shortages are a major issue limiting growth capacity.
Inflation is expected to remain elevated globally in 2022. This is mainly a result of supply constraint, higher commodity prices and to a lesser extent, a rebound in demand. This complicates the work of central banks as they face a tradeoff between fighting inflation and potentially stalling economic recovery. The Bank of Canada is expected to start raising rates in 2022, with rates at 1.00% by year end.
Read the full 2022 Economic Outlook for details on these issues and more, including:
- COVID as an atypical recession
- A mismatch between supply and demand
- Global monetary policy tightening
- The Canadian economy in 2022
- What to expect in Alberta?
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