More than two-thirds (68%) of Canadians say the economy will fall into a recession later this
year, according to a new poll.
The survey, conducted by Maru Public Opinion, found that Canadians have an increasingly
pessimistic view of the economy as interest rates rise to cool off red hot inflation.
The poll found that 17% or respondents feel that Canada’s economy is already in a recession,
while 15% say they are not concerned about a recession nor do they believe Canada is in the
middle of one.
The results come as the Bank of Canada tries to dampen inflation that has seen food, shelter
and gas prices rise at a pace not seen for 30 years.
Canada’s Consumer Price Index (CPI) increased 6.8% on a year-over-year basis in April, and
economists widely expect it rose even more in May, a month that saw gas prices reach record
levels across the country.
Rising costs have pushed most Canadians to reduce spending, the poll found. A majority of
people surveyed (56%) have reduced their spending due to inflation, with food topping the list in
terms of which spending category has been most affected.
Canadians are also reducing their entertainment spending (55%), clothing budget (54%) and the
amount they spend on gas (53%).
The Bank of Canada raised its trendsetting interest rate by 50 basis points on June 1, bringing
the policy interest rate to 1.5%. The central bank has warned of more rate hikes to come and
could follow the U.S. Federal Reserve's 75 basis point rate increase when it issues its next
decision in July.
The survey of 1,515 Canadians was conducted between June 17 and June 19 and has a margin
of error of +/- 2.5 per cent, 19 times out of 20.