This quarterly economic forecast for the province of Prince Edward Island examines the economic outlook for the province, including gross domestic product (GDP), output by industry and labour market conditions.
Tourism Collapse Outweighs Virus Containment: Prince Edward Island’s Two-Year Outlook—September 2020
Tourism Collapse Outweighs Virus Containment: Prince Edward Island’s Two-Year Outlook—September 2020
Provincial Economic Analysis
$705.00
- Prince Edward Island is currently in the midst of its worst recession on record. Thankfully, the downturn should be short-lived, as the Island has managed to contain the coronavirus through social distancing.
- Barring a second wave of the virus, we expect P.E.I.s economy to return to trend growth levels by the end of 2021. Still, the second-quarter drop of 15 per cent will be the biggest on record and result in an overall annual contraction of 4.9 per cent in provincial GDP this year.
- One of the key drivers of growth on the Island is tourism, which, due to border closures, hammered travel-related industries in the second quarter. However, with visitors from the other Atlantic provinces allowed to enter P.E.I. again as of July 3, the tourism industry should begin to pick up over the back half of the year.
- During economic crises, the government is an essential source of growth and stability. With the release of its delayed spring budget on June 17, the province outlined measures to help mitigate the damage from the COVID-19 pandemic and the resulting recession. As well, it shed light on the impact of the recession on the fiscal situation.
- Overall, the province expects the deficit to soar to $172 million this fiscal year as a result of stimulus spending and revenues being hampered.
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