The Alberta government’s credit profile has been upgraded on the back of the continued high price of oil.
“While Alberta continues to face volatility in revenues from oil prices, the sustained high oil prices above pre-pandemic levels have changed the fiscal trajectory of the province towards ongoing surpluses,” reads the agency’s latest assessment.
“The stable outlook reflects Moody’s view that the fiscal improvements from continued projected surpluses and significantly lower debt levels over the next two years will allow the province to balance the key pressures from inflation and fluctuating resource prices.”
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The province’s short-term issues, commercial paper, and baseline credit assessment were all also upgraded.
The review notes the “overall improving economic conditions” in the province.
It forecasts that revenue growth will moderate in the next 24 months relative to the strong growth of the past two years, but will remain high.
“Revenue levels will remain sufficient to offset inflationary expense pressures resulting in sustained surpluses.”
Alberta Finance Minister Travis Toews called the upgrades “wonderful news” in a social media post, citing “excellent financial management and strong economic performance.”
Moody’s review wasn’t entirely glowing. It cited Alberta’s “moderately negative” rating on environmental, social and governance considerations that it says reflect “highly negative exposure to environmental risks.”
The agency says Alberta’s ratings could be further upgraded if the province’s fiscal position continues to improve despite high inflation and interest rates.
Conversely, it adds that the rating could be downgraded if revenues decline below projections and prompt future deficits.