CALGARY -- ATB Financial is forecasting a ‘mix of sun and cloud’ for Alberta's economy in the years to come, according to a new report.

Compared to its previous study released in March, the new report is more optimistic when it comes to how Alberta will emerge financially from the global pandemic.

"Since we did the forecast earlier in the year, some positive developments have happened," said Rob Roach, ATB Financial's deputy chief economist. "One big one, which is always important for Alberta, is oil prices have performed better than we were expecting."

The higher-than-expected oil prices rising combined with increasing vaccination rates and a strong recovery south of the border is why ATB is now predicting Alberta's economy will see an estimated five per cent growth for the real GDP this year compared to its earlier outlook of 4.1 per cent.

ATB warns economic recovery will not happen overnight.

"Alberta was hit harder than the rest of the country by the one-two punch of the pandemic and the oil price crash so we have more ground to recover," said Todd Hirsch, vice president and chief economist at ATB Financial, in a press release.

"If people continue to get vaccinated, the economy is able to gradually reopen and OPEC continues to keep a lid on oil supply, Alberta’s recovery should stay on track."

However the economic contraction in 2020 was higher than expected —8.2 per cent versus 7.1 per cent — according to ATB’s study.

"It’s going to take until 2023 for our economy to catch up to where we were before the pandemic," said Roach.

The report also predicts unemployment in the province will stay relatively high. 

"Alberta's energy sector has bounced back but ongoing constraints on growth mean we can't rely on it to generate another jobs boom," Hirsch said. "But industries such as tech, renewable energy, clean energy tech, agrifoods and a broad array of entrepreneurial activity bodes well for Alberta's economic future."

The outlook highlights some positive news on the financial front. Household savings in the country jumped from 1.3 per cent of disposable income in 2019 to nearly 15 per cent in 2020—an average of $5,574 per Canadian.

Retail sales in Alberta have improved and, according to the report, are well above pre-pandemic levels.