Sask. expected to buck negative economic trends
REGINA—Theonlyprovinceexpected to post economic growth this year — Saskatchewan — is poised to make a “soft landing” when the global economy recovers in 2010, says TD Bank chief economist Don Drummond.
“Saskatchewan will buck the trend as the only province to have a positive increase in real output in 2009 — albeit only 0.4 per cent — down substantially relative to our estimate of 3.1 per cent for 2008,” Drummond told TD clients at a luncheon in Regina on Wednesday.
Drummond conceded Saskatchewan’s economy is slowing down, but not as much as other provinces, such as Alberta, which is expected to see a 2.6 per cent decline in real gross domestic product (GDP) in 2009, or Ontario, which is expected to see real GDP decline by 2.9 per cent.
And Saskatchewan should be one of the first provinces to emerge from economic doldrums, as commodity prices begin to pick up and the global economy starts to recover next year.
“I think with that mild hiccup in 2009, we’ll start to see firmer growth and we’ll definitely see a soft landing — probably not at the pace of the last five years, but fairly good growth nonetheless.”
DrummondsaidSaskatchewanhassome unique advantages that enable it to weather the economic storm better than most.
First, the province has been outperforming the national average in terms of real GDP per capita since 2004 after more than two decades of underperformance. In 2009-10, Saskatchewan’s real GDP per capita — which measures economic output per person — is forecast to outperform the national average by 10 per cent.
Nominal GDP per capita — which measures the value of economic output per person — is forecast to exceed the national average by 25 per cent, Drummond said. In fact, only Alberta outperformed Saskatchewan in terms of nominal and real GDP growth from 2003-08.
In addition, population growth, after decades of stagnation and outmigration, has been on an upward swing since 2006 and broke the one-million mark in 2007.
With its resource-based economy, Saskatchewan was affected by the steep decline in commodity prices in 2008, especially oil and natural gas prices. But potash and uranium prices have held their own and are expected to rise, along with the prices of other commodities, throughout the forecast period.