Canada’s real gross domestic product is now expected to grow 2.4% in 2015, a reduction from the forecast of 2.7% issued in December, according to the Economic Outlook report released today by RBC Economics. The GDP forecast for 2016 is now 2.3%. While the drop in energy prices negatively affected Canada's oil and gas sector, much of the weakening will be offset by strength in consumer spending and exports.

The plunge in oil prices, ensuing slide in the Canadian dollar, and policy response by the Bank of Canada considerably altered the macroeconomic backdrop that will shape provincial economic performance, according to the report, and the effect will differ vastly from province to province.

Real GDP growth forecast now shows a significantly dimmed outlook for Alberta and, to a lesser extent, Newfoundland and Labrador and Saskatchewan. However, prospects are brighter than previously anticipated for Ontario, British Columbia, Quebec and most of the other oil-consuming provinces.

The Provincial Outlook’s predicted growth in real GDP:

• British Columbia: +3.1% in 2015, +2.8% in 2016
• Alberta: +0.6% in 2015, +1.1% in 2016
• Saskatchewan: +2.1% in 2015, +2.1% in 2016
• Manitoba: +2.8% in 2015; +2.8% in 2016
• Ontario: +3.3% in 2015; +2.7% in 2016
• Quebec: +2.0% in 2015; +1.9% in 2016
• New Brunswick: +1.9% in 2015; +1.5% in 2016
• Nova Scotia: +2.2% in 2015; +2.1% in 2016
• Prince Edward Island: +1.6% in 2015; +1.7% in 2016
• Newfoundland and Labrador: +0.8% in 2015; +0.2% in 2016

RBC forecasts the unemployment rate to decline to 6.3% in 2015 from 6.9% in 2014.