Quebec households are not regarding to see the light at the end of the tunnel with inflation and the rising cost of living since economic activity in Quebec is expected to remain neutral until mid-2023, according to an analysis by Gardens.
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“Quebec’s economy will be shaken both by the difficulties of households [et] a decline in business investment and exports in the coming quarters,” it said.
The province had experienced a period of strong growth before slowing down, and the decline is expected to continue in the coming quarters. The residential real estate market should therefore continue to slide, while the rise in interest rates might hold back consumers and businesses.
Added to this are high inflation and the difficulties of the global economy, which will have repercussions on exports and industrial investments.
“Economic activity in Quebec will thus be almost neutral until mid-2023, and the line will be thin between very weak growth and a slight decline in GDP. [produit intérieur brut] real”, it was established.
Support measures put in place by Ottawa should, however, help households to cope with this increase in the cost of living.
According to Desjardins, the persistence of inflation “remains the main risk for the global economy”, forcing many central banks to continue raising their interest rates.
Note that the inflation rate was 7% for the month of August 2022 compared to the previous year and that the Consumer Price Index increased by 7.1% in Quebec d year to year.
