Canada’s main oil-producing province of Alberta on Thursday forecast a virtually unchanged budget surplus in the 2023/24 fiscal year and said the outlook was strong, despite unpredictable crude prices.
The projected C$2.44 billion surplus is slightly larger than the C$2.35 billion predicted in the February budget.
“The economic outlook for Alberta remains strong, bolstered by population growth and the labor market,” the province’s finance ministry said in a fiscal update.
Alberta is Canada’s largest oil-producing province and home to the oil sands, the world’s third-biggest crude reserves. Its economy is closely tied to oil prices.
“With rising demand expected to outpace supply, oil markets should tighten in the second half of the year and support prices… downside risks remain elevated,” said the update, citing China’s economic slowdown and the risk posed to growth by high global interest rates.
Alberta’s right-of-center government has vowed to protect the energy industry, saying Canadian Prime Minister Justin Trudeau’s push to cut emissions of greenhouse gases nationally will cripple oil and gas output.
Resource revenue is seen at C$17.67 billion in 2023/24, down from the C$18.36 billion forecast in February, due to lower royalties. The West Texas Intermediate oil price is estimated to average $75 U.S. per barrel, $4 lower than in February.
This should be offset by a narrower light-heavy oil price differential, which is now forecast to average $15 per barrel, $5 narrower than forecast in February.
Real gross domestic product is expected to rise 3.0% in 2023, compared to the 2.8% seen in February, and grow by 2.9% in 2024. The improved outlook is driven by the large number of people moving to the province.
Alberta’s population is forecast to grow 4.4% in the 2023 census year, which would be the fastest annual growth since 1981.
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