Most Canadians hold the view that high spending by the federal government is what hinders the nation’s central bank from taming inflation, according to a survey by the Bank of Canada (BoC).
“Most consumers think the Bank’s ability to get inflation back to target is hampered by high government spending and challenges with supply chains,” said the report, as first reported by Blacklock’s Reporter.
The survey, conducted nationwide between Jan. 27 and Feb. 16, said “many people believe” supply chain issues will be resolved in the next two years. “Those who expect high government spending to impact inflation believe it will continue to do so for a long time,” it added.
‘Uncertain’
The opposite holds true when it comes to “high government spending.” Nearly 33 percent of consumers surveyed said they expected the high spending to continue impacting inflation even after five years, surpassing the expectation for 3-5 years (31.66 percent) and 1-2 years (29.31 percent).“High inflation and rising interest rates are putting pressure on consumers—and particularly on mortgage holders,” said the BoC report.
“In response, consumers expect to spend less on discretionary services—such as travel, restaurant meals and other social activities—than they did over the last 12 months.”
The central bank said most Canadians are not optimistic with the outlook of the economy as they see “a recession as the most likely scenario” in the next 12 months.
[M]any are uncertain about where the economy and labour market are going,” the report said.
Ottawa in its latest budget on March 28 predicted that a half-trillion worth of yearly federal spending will become normalized beginning in 2024, according to the findings of Blacklock’s Reporter.
