Provincial Outlook Long-Term Economic Forecast: Nova Scotia—2020

Please note that this forecast was prepared before COVID 19 dramatically changed the near term economic outlook.

• Real GDP growth in Nova Scotia is expected to moderate over the long term, with average annual gains of 1.0 per cent forecast between now and 2040.
• Changing demographic patterns will keep potential output growth modest and affect all areas of the economy.
• Subdued growth in real wages and the rise in the number of retirees, with their reduced spending power, implies that growth in consumer spending in Nova Scotia will be limited over the long term
• The long-term outlook for business investment is bleak, as major capital projects are set to be completed over the medium term and petroleum companies will pull back on their offshore drilling activities.
• Encouraging factors, including new trade agreements, rising global demand for seafood products, and a competitively low Canadian dollar, bode well for Nova Scotia exporters over the forecast.
• While the provincial government’s fiscal position remains sound, the aging of the population will drive higher public spending on health care while also narrowing the government’s available tax base.