Despite Canada not officially being in a recession, many people are feeling like the economy is in a downturn, according to RBC. The Royal Bank of Canada has noticed that while the country's economic indicators do not meet the technical definition of a recession, the everyday experiences of Canadians tell a different story. Higher costs of living and rising interest rates are making it harder for families to manage their finances.
One major factor contributing to this feeling is the increased cost of essential goods and services. Prices for groceries, fuel, and housing have all surged, putting a strain on household budgets. Even though wages have gone up in some sectors, they haven't kept pace with inflation, leaving many people feeling squeezed. The economic uncertainty has led to decreased consumer spending, further slowing down economic growth.
Another issue is the rising interest rates set by the Bank of Canada to combat inflation. While this policy is meant to stabilize the economy, it has led to higher borrowing costs for mortgages, loans, and credit cards. As a result, many Canadians are finding it difficult to make ends meet. The housing market has also been affected, with fewer people able to afford new homes or manage existing mortgages, leading to a slowdown in real estate activity.
Despite these challenges, RBC remains hopeful that the situation will improve. They believe that as inflation begins to stabilize and the global economy recovers, Canada will see a return to more robust economic growth. In the meantime, they suggest that Canadians focus on budgeting carefully and seeking financial advice to navigate these tough times. While it may not be a recession by definition, the current economic climate certainly feels like one for many Canadians.
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