Newfoundland and Labrador’s real gross domestic product (GDP) will grow by 0.5 per cent this year before expanding by 2.9 per cent in 2023 and 2.2 per cent in 2024.
A factor behind the lacklustre performance is that oil production remains constrained despite oil prices at plus-$90 per barrel.
Employment increased by around 3.1 per cent last year while a similar gain is anticipated for 2022 as well. Unemployment, while declining, will still remain at double-digit levels through 2026.
If inflation does not ease over the next few months, the boost to spending from excess savings will quickly erode.
The province’s housing market is doing well despite higher mortgage rates, but we expect housing starts to cool and then decline in the second half of this year.
The province plans to balance the books some time over the medium term, but this will be challenging due to weak economic growth and rising expenditures on healthcare.
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