As the economy struggles through the COVID-19 pandemic, Canadians are hoarding more cash than ever before.
According to a CIBC report, Canadian households and businesses are sitting on no less than $170 billion in excess cash. Consumers alone are holding onto $90 billion, which is equal to 4% in consumer spending. The savings rate has jumped to 13 per cent, up from 3.6 per cent before the pandemic began.
As strategy expert Mark Satov explains to Yahoo Finance Canada's Alicja Siekierska, the pandemic has been good to employed, affluent Canadians when it comes to saving cash. Government programs, such as CERB, have also boosted the savings rate, he argues.
So what does this mean for the economy? According to Satov, spending is going to rapidly increase next year. "It's going to go from pandemic to pandemonium," he says.