Seat belt sign is on: High oil prices set to propel Alberta’s economy despite severe global turmoil

CALGARY, Alta., May 19, 2022 /CNW/ – The latest quarterly forecast from ATB Financial’s Economic Outlook Report from Alberta the economy remains strong as it weathers global headwinds and continues to build momentum in 2022. from Alberta the economy is facing the same challenges as the rest of the world due to the war in Ukraine: slower global growth, higher inflation, trade disruptions and heightened uncertainty. However, because alberta is a major oil producer with fewer direct economic ties to Russia and Ukrainethe province’s exposure to the negative economic effects of war is less than elsewhere and the economy will continue to grow in 2022.

from Alberta real gross domestic product (GDP) is expected to rise 5.0% this year, followed by 3.5% in 2023. This comes after a 5.1% rebound in 2021 from the record contraction of 7.9% in 2020.

ATB Financial Economic outlook Report describes two key factors influencing from Alberta current economic trajectory:
1) The global economic headwinds created or exacerbated by the Russian invasion of Ukraine;
2) The high prices of the main commodities produced in alberta including crude oil and natural gas.

Strong global headwinds
The Russian invasion of Ukraine changes the course of the global economy in 2022. Disruptions to the supply chain caused by war have a significant impact on the price of raw materials such as oil, natural gas, base metals, fertilizers and wheat.

And, as the pandemic continues to create economic challenges, forecasts assume that future waves of the virus will not be as economically disruptive as seen in 2020 and 2021.

Higher prices
AAlberta received a boost from higher oil prices, which improved the sector’s cash flow and increased capital spending. In some regions, the positive effects of higher prices are offset by rising input costs. This is seen in the case of the agriculture industry where the costs of fuel, fertilizer, feed and labor have also increased. While some growers may be in a position to reap the benefits of price spikes, the overall impact of higher inflation on operating costs will weigh heavily on margins for many.

from Alberta the economy is experiencing the same global headwinds as anywhere else,” says ATB’s Deputy Chief Economist, Rob Roach. “But, as a major oil producer, we benefit from exorbitant prices which help stimulate our economy.”

About ATB Financial

With $56.6 billion in assets, ATB Financial is a alberta-built financial institution that is a catalyst for economic growth in our province. We started in 1938 to help Albertans through tough economic times. Today, ATB Financial’s 5,000 team members enjoy delivering exceptional experiences to more than 800,000 customers through our many branches and agencies, our 24-hour customer service center , four entrepreneur centers and our digital banking options.

Disclosure

ATB Financial’s economic outlook is intended for general information and educational purposes only and should not be considered legal, financial, tax or other specific professional advice or recommendations. The information presented is believed to be reliable and up-to-date, but it is not guaranteed that it is accurate or that it constitutes a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. Actual result may vary significantly. ATB Financial and any of its affiliates are not responsible for any errors or omissions in the information, analyzes or opinions contained in this report, nor for any loss or damage suffered. No endorsement of 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.

For more information or interview requests, please contact:
ATB Financial, Media Relations media@atb.com

SOURCE Financial ATB

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Felix J. Dixon