Newfoundland and Labrador’s Fiscal and Economic Outlook on Track with Budget 2024 Projections

The Honourable Siobhan Coady, Deputy Premier and Minister of Finance, today delivered the mid-year fiscal and economic update.

As highlighted in Budget 2024 – Transforming: Our Health. Our Economy. Our Province., the economy is expected to show significant growth in 2024:

• Real Gross Domestic Product is expected to grow by 3.3 per cent, driven by strong consumer spending.
• Employment is forecast to increase by 2.8 per cent, while the annual unemployment rate is forecast to be at 10.5 per cent – a near historical low.
• Retail sales are expected to remain strong, increasing by 5.1 per cent; up from 2.8 per cent expected at budget.
• Housing starts are up significantly through the first three quarters of the year, and home sales are also above last year’s levels through September.
• Population growth continued for the last 14 quarters. On an annual basis, Newfoundland and Labrador’s population increased by 6,340 persons from July 1, 2023 to July 1, 2024.
• Inflation has declined to 2.1 per cent over the January to September period, compared to 2.6 per cent nationally.
• Recent data shows inflation easing even further with growth of only 0.7 percent in September. This was the lowest monthly inflation rate since December 2020.
• Industries including mining, oil and gas, fisheries, and wind-hydrogen, the technology sector, and film and television are expected to contribute to continued economic growth.

As of mid-year, the provincial deficit remains low. The projected deficit for 2024-25 on $10.4 billion budget is $218 million, which is approximately two per cent of total revenues; and is a slight variance from the Budget 2024 projection of $152 million by $66 million which is 0.65 per cent of total revenues. Other highlights include:

• Revenues have decreased by $164 million from the Budget 2024 estimate. This is largely due a reduction in oil royalties because of lower production and a slightly lower oil price, partially offset by a lower exchange rate.
• Expenses are down $98 million from the Budget 2024 estimate due to the timing of program expenses, as well as gains associated with the province’s pension and other post-employment benefit liabilities.
• The average price of oil for 2024-25 has been revised to US$81 from the Budget 2024 projection of US$82. The Canada to United States exchange rate has been revised to 73.2 cents from the Budget 2024 forecast of 74.7 cents.
• As of 2024-25, total contributions to date to the Newfoundland and Labrador Future Fund will be approximately $354 million.

The 2024 Fiscal and Economic Update is available here.