Amid rising interest rates, inflation, and complicated supply chain issues, asking Canadians whether they think the country is in a recession is a type of benchmark to gauge how they feel about the current state of the economy.
Let's look at whether Canadians believe the country is in a recession, and outline some of the factors at play.
Do Canadians Believe the County is in a Recession?
According to multiple reports, the short answer is: Yes, most Canadians believe the country is in a recession. A significant portion believe that a recession isn't here yet but that it's looming.
According to Global News, which reported on a wide-ranging survey by Leger, 59% of Canadians think Canada is in an economic recession, and more than 80% of Canadian respondents think that prices will keep going up.
The survey included both Canadians and Americans, and the American respondents answered similarly about their country: 64% of American respondents think that the United States is in a recession. Interestingly, only 66% of American respondents think that prices will continue to go up. This survey was completed by 1,538 Canadians and 1,002 Americans from July 8 to 10, 2022.1
For more data, CityNews Everywhere in Toronto shared a poll from Yahoo Canada, according to which 26% of respondents think that Canada is “currently experiencing a recession” and 59% believe that the country is heading toward a recession.2
Why Do Canadians Think a Recession is Here (or Looming)?
Many factors contribute to whether a country is in a recession. The first to consider is inflation. In June 2022, Canadian inflation rates hit 8.1%, the highest they have been in over four decades. In response to rising inflation, the Bank of Canada has been increasing interest rates. In July 2022, the Bank of Canada raised its benchmark interest rate by the largest amount in more than 20 years, increasing it to 2.5%.3
And that's likely not the last interest rate hike. Economists predict that the Bank of Canada will initiate additional rate hikes. The goal of increasing interest rates is to slow down spending to fight inflation. However, higher interest rates make it more expensive to buy large-ticket items, such as homes or cars.4
What do you think of Canada's economy right now? Do you believe that the country is in a recession or that it's headed for one? Or are all these worries blown out of proportion? Recession or not, it's important to understand how the country's economy is stacking up and what to be aware of in case there is a recession.
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