If the Yukon’s economic future was foretold by a Magic 8-Ball, its reading would say, “Outlook not so good.”

While the gross domestic product (GDP) is predicted to grow slightly, by 2.8 per cent, in 2016, the early forecast for 2017 shows a major shrinkage of 5.7 per cent, according to prognostications from the Department of Economic Development.

If this prediction bears out, it will be the most significant single-year contraction in at least eight years.

Looking to the near future however, a shake of the 8-Ball would produce a happier prophecy: “Outlook good.”

After three straight years of an economic decline in the territory, things are looking up for 2016, with slight increases predicted in the mineral, retail and tourism sectors, the government says in its May 2016 Yukon Economic Outlook report.

The GDP is forecast to grow a touch in 2016, thanks in part to ramped-up mining efforts at the Minto Mine’s north pit.

Though the number of people employed in the Yukon is predicted to increase this year, the unemployment rate is expected to rise as well, to 6.6 per cent.

But growth anticipated in 2016 won’t last. The Yukon’s economy will experience a painful contraction in 2017, predicts the government.

Here too, the Minto Mine plays a key role, as its planned temporary shutdown in 2017 is expected to curtail mineral production in the territory.

Minto is currently the only hard rock mine operating in the Yukon.

Premier Darrell Pasloski has made it clear that he supports resource extraction, and that he considers it fundamental to the territory’s economic well-being.

“As I have said many times: so goes mining, so goes Yukon. I’ve also said many times that now more than ever, we need to stand up for our resource sector, so we have been working on that,” he said in the legislature earlier this month.

The government plans to respond to the looming economic downturn by making “strategic investments” in infrastructure, Carol MacLellan, the department’s director for business and economic research, said in an interview early this afternoon.

This includes spending on telecommunications, power generation and road access, so that the Yukon can more easily transport minerals to market.

The government also continues to work on attracting investors to invest in the Yukon, she said.

The Star was told Economic Development Minister Stacey Hassard was not available for an interview for this story.

Reflecting back on 2015, Statistics Canada estimates that the Yukon’s GDP shrunk by 3.8 per cent. This represents the third year in a row that the territory’s GDP has contracted.

The GDP represents the dollar value of all goods and services produced within a jurisdiction in a given time period.

Statistics Canada pegged the Yukon’s GDP for 2015 at $2.177 billion.

In 2014, the GDP was $2.264 billion (all GDP figures have been adjusted for inflation).

The Yukon isn’t the only jurisdiction in Canada that’s seeing tough times.

“When we look specifically at GDP, all of the smaller resource-based economies tend to be the hardest hit,” said MacLellan.

Newfoundland and Alberta are also struggling, she said.

Canada as a whole has seen sluggish growth, and will continue to in 2016, says the Bank of Canada.

Canada’s central bank predicts the Canadian economy will experience “relatively weak” growth (1.7 per cent) in 2016, and a slight improvement of 2.3 percent growth in 2017.

Lower oil and mineral prices are key contributing factors.

Oil prices plummeted in the last two years as new extraction techniques like hydraulic fracturing (“fracking”) have unlocked massive supplies of oil in shale rock, particularly in Texas and North Dakota.

Iraq has almost doubled oil production since 2014, and Saudi Arabia ramped up production in an attempt to compete with the United States.

And, now that a nuclear deal has been struck between the U.S. and Iran, that Middle Eastern country too is expected to enter the fray, further saturating a market that is already in oversupply.

The Canadian economy also took a hit from substantial drops in mineral prices, which have resulted in mine closures, job losses, and a reduction in exports and in investment in the mining sector, according to the economic outlook report.

“Resource extraction activities continue to be a significant contributor to Canada’s economy, and growth prospects for the country are inherently linked to the performance of commodity prices,” reads the report.

“The weakness in mineral prices that began in 2014 became more prominent in 2015 and has continued into 2016.

“Prices for key commodities such as gold, silver and copper recently touched lows not seen in five to six years.”

The International Monetary Fund predicts that the Canadian economy will grow slower than that of Canada’s closest neighbour.

The U.S. economy is forecast to bump up 2.4 per cent in 2016 and 2.5 per cent in 2017.