OTTAWA, Feb. 23, 2015 /CNW/ - The sudden collapse in oil prices has significantly altered the economic landscape in Canada and around the world. While some provinces will be negatively impacted, Quebec's economic outlook is improving this year, according to The Conference Board of Canada's Provincial Outlook: Winter 2015.
"The declining dollar and a stronger U.S. economy will push Quebec's exports of goods and services to a new high in 2015. This will help drive Quebec's economic performance this year, allowing real GDP growth to reach 2.4 per cent, up from 1.5 per cent last year," said Marie-Christine Bernard, Associate Director, Provincial Forecast.
- Quebec's economic performance is strengthening thanks to ongoing export recovery, lower Canadian dollar, a stronger U.S. economy, lower gasoline prices and greater after tax income to households.
- Real GDP is forecast to advance by 2.4 per cent in 2015 and 2.5 per cent in 2016.
- Nationally, economic growth will be just 1.9 per cent in 2015, down from 2.4 per cent in 2014.
Net exports will contribute to real GDP growth in the province this year, with exports growing by 3.6 per cent – their fastest pace since 2000. This will trigger a turnaround for business investment, particularly for machinery and equipment.
Employment is poised to rise this year by 0.8 per cent. This, along with the lower oil prices, will provide a boost to households' real purchasing power. Household spending is expected to increase by 2.1 per cent in 2015.
Federal and provincial government revenues will feel the squeeze from reduced nominal GDP growth. In Quebec, the goal will be to hold overall program spending increases to just over 0.8 per cent in 2015-2016, down from 2.4 per cent for the 2014-2015 fiscal year.
The downturn in oil producing provinces is expected to be relatively short lived as prices are expected to rise gradually as the global oil glut eases and global demand improves later this year and in 2016.
The Conference Board of Canada will host a webinar, Canada's Fiscal and Economic Outlook: Small Winners, Bigger Losers, on March 13, 2015 11:00 AM EST.
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