A pair of surveys released by the Bank of Canada reveals that Canadians are minimizing their spending and expect a recession to occur later this year.
The surveys discovered that around 90 percent of Canadians are minimizing travel spending and about 60 percent are reducing spending on groceries.
Anupam Das, an economist at Mt Royal University, said: “Everyone is actually expecting that we are moving towards a recession within the next 12 months or so.
“I think they are not wrong, (however), I cannot predict if there will be a recession.”
The survey discovered that 70 percent of Canadians feel a recession is coming in 2023 and 66 percent of businesses feel the same.
The Bank of Canada will reveal its interest rate decision next week, with many anticipating yet another increase.
Previous inflation cycles have generally been triggered by consumers purchasing more.
The recent cycle has generally been caused by supply issues.
Das said: “It’s still an inflation, whether it’s a demand side or a supply side.
“Policymakers tried to cut that inflation, but I think it’s the consumers who are the biggest sufferers in this case.”
Generally, citizens are experiencing more trouble accessing credit and over half of citizens don’t expect wages to catch up.
Analysts are anticipating another quarter-point interest rate bump.
Once that happens, the base interest rate will be at 4.5 percent, its highest since 2004.
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