Alberta’s unemployment is forecast to rise to 9.5 per cent this year as the province suffers through another recession as a result of collapsing oil prices and the spread of COVID-19 (coronavirus).
The Provincial Forecast Update by TD Economics said the province’s economy will contract by 5.5 per cent this year as well.
“In Alberta, Saskatchewan, and (Newfoundland & Labrador), the hit to near-term household incomes, investment, and government revenues from COVID 19 will be exacerbated by the recent collapse in crude oil prices. Oil producers have responded by slashing capital spending plans, with some taking the costly step of shutting-in production,” said the report.
The report said Alberta’s unemployment rate this year will be the third highest in Canada behind Newfoundland & Labrador at 13.5 per cent and Prince Edward Island at 10 per cent.
Alberta’s unemployment rate in 2019 was 6.9 per cent.
TD is forecasting Alberta’s unemployment rate to fall back to 7.9 per cent in 2021 while the economy will bounce back to 3.2 per cent.
In Canada, the economy is forecast to contract by 4.2 per cent this year but see 3.6 per cent growth next year. The national unemployment rate is expected to rise to 7.5 per cent this year from 5.7 per cent in 2019 then dip back to 5.9 per cent in 2021.
“With efforts to contain COVID-19 a top priority, no provincial economy is spared from the wreckage caused by the ‘sudden stop’ in activity observed across major sectors,” said the report.
“In our updated national forecast, we assume that the disruptions end in May, paving the way for a strong recovery in the second half of 2020 . . . Even then, the severe economic losses suffered over the March – April period are expected to drive historic real GDP corrections for the year as a whole.”
