Outlook 2006: Adjusting to High Energy Prices [Atlantic Provinces Economic Council Vol 43 Iss 1]

The world economy is again adjusting to a significant increase in oil prices. Since 2002, oil prices have more than doubled and in early October, they were almost 50% higher than in December 2004. With the economy at full production capacity, the Bank of Canada has indicated that interest rates will need to rise further to keep core inflation on target. With respect to economic growth, Newfoundland and Labrador is expected to lead regional and national rankings next year. Oil production from White Rose and mining at Voisey’s Bay should contribute to growth in real GDP of about 5% for the province. This issue of Atlantic Report provides estimated growth rates for the four Atlantic provinces, as well as an overview of the influencing factors in the global, U.S and Canadian economies.