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Prince Edward Island is expected to see a slight boost in GDP growth in 2014, according to the latest RBC Economics Provincial Outlook released Thursday.
Prince Edward Island’s economic performance was dampened by softness in exports in the first half of this year, leading RBC to project the province’s GDP will grow only a modest 1.2 per cent in 2013.
But next year, RBC sees a rotation emerging and demand for the province’s export goods supporting a slightly quicker 1.4 per cent pace in 2014.
“Following robust performance in 2012, export growth has softened in 2013 though overall goods exports edged out a positive, albeit small, gain in the first nine months of the year,” said Craig Wright, RBC’s senior vice-president and chief economist.
Annual potato production gains reached a seven-year high in 2013.
This, coupled with supportive demand conditions, renewed export strength for the frozen variety of potatoes after a sluggish start to the year.
Aerospace exports took a tumble as uncertainty in the United States likely held back orders.
RBC expects a retracement of the aerospace decline and continued robust gains for the province’s seafood products will be the main drivers in 2014.
“The recently announced comprehensive economic and trade agreement between Canada and the European Union is expected to support long-term export performance in the province, and with the ratification of the deal expected in 2015, any positive lift caused by exports offers upside potential to P.E.I.’s 2015 growth prospects,” added Wright.
Not all is rosy on the horizon, however.
Looming demographic challenges and a drag from fiscal restraint are expected to slow real GDP to 1.1 per cent in 2015.
As for the 1.4 per cent boost expected in 2014, despite being an improvement over 2013, P.E.I.’s GDP growth will remain well below the national average.