Inflation, rising interest rates, debt: the cost of living could increase more slowly, but no reversal is really possible according to an economic expert.
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“What is happening on the other side of the planet has an impact on our campaigns,” began by recalling Simon Brière, financial market analyst at RJ O’Brien at the microphone of Philippe Vincent Foisy on Friday.
While wheat prices doubled following the Russian invasion of Ukraine, they returned “not exactly to normal”, but fell by half according to the economist. The good harvests in Canada, Australia or Russia have been a boon for the price of wheat.
Regarding the prices at the grocery store, “there is a kind of habituation”, noted the expert.
For him, inflation and the cost of living are not about to drop and return to what we had before.
“We arrive in a situation where we have a lot of inflation,” he said. But we are aiming for 2%, it is a way of saying that there is life”.
Prices may rise less rapidly, but there will be no turning back.
Property
“Today, access to property is very difficult,” he conceded. According to him, we “magazine payments”, that is to say that a potential buyer estimates how much he can pay per month in order to respect a budget.
“With the increase in the interest rate, we just reduce the borrowing capacity of about 40,” he said.
The economist also says he is very worried about the debt. “We have a huge debt here in Canada,” explained Mr. Brière, adding that for every $100 of income, we have about $180 in debt.
He relativizes by saying that it is better that the indebtedness is in a real estate asset within the framework of a mortgage than indebtedness on a credit card on fast consumption.
Also, the debt in Canada is heavily held by Canadians and not by foreign players.
“Debt makes the economic environment extremely vulnerable to rising rates,” he said.