The Royal Bank is out with its latest forecast for the Canadian economy, and it’s forecasting 2.1 per cent growth across the country, this year.

Released Monday morning, the outlook expects Western Canada to dominate the growth rankings, particularly Alberta at a predicted rate of 3.8 per cent growth.

“This year like last year, we have Alberta in first place,” RBC Chief Economist Craig Wright tells 660News, “and in 2013 we think Saskatchewan may sneak away with the lead.  But still very strong growth” (for Alberta), “relative to its own history, but also relative to the rest of the provinces.”

Wright notes increased activity in the oil patch is spilling over to all areas of the Alberta economy.

“With jobs, with income and with confidence, consumers spend,” says Wright, who notes that oil production in the province is growing at its fastest rate since 2003, but natural gas production is at its lowest level in six years. “So the retail numbers have been strong, auto sales have been strong, the housing sector’s been strong.  So it’s very much a broad-based expansion and it’s … a trend we expect to continue.”

But the RBC forecast does see some possible storm clouds on the horizon, predicting the Bank of Canada will raise interest rates next year, thus putting a drag on some economic sectors.

“It’s really just the Bank of Canada taking its foot off the gas pedal, rather than hitting the brakes hard,” adds Wright. “We’re looking at interest rates at two per cent which would still be about half the normal level.  So it will be a force that will ease growth activity but nothing dramatic is expected.”

The forecast’s predicted rate of growth for Alberta in 2013 is 3.6 per cent.