2023-05-17 18:54:19
Despite an inflation rate that seems to be stabilizing from one year to the next, economic turbulence is to be expected, according to an expert.
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In an interview on the program 100% Nouvelles, Jimmy Jean, vice-president and chief economist of Desjardins Group, believes that cracks are beginning to appear despite a certain resilience in the economy. Moreover, he notes the strengths of the current state of the economy.
“The start of the year has been better than expected for several reasons. The reopening in China, the best resistance of Europe at the energy level […] We really had a job market everywhere in the world that was extremely robust,” he explains.
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The annual inflation rate in Canada was 4.4% year-over-year in April. Despite this, the economic situation in the United States is of great concern as the American central bank risks raising the key rate once more. Inflation is also on the rise once more in our southern neighbours.
“We have major turbulence in the American banking sector and the turmoil is just starting to be felt. We have interest rates that remain high […] the latest trend in inflation […] shows a rise in inflation. There are elements that are worrying,” he warned.
Many Canadians are worried regarding a possible increase in the country’s key interest rate. According to Jimmy Jean, the latest inflation data will not tip the scales.
“I don’t think we’ve been there in Canada. It’s a number, and it comes following nine consecutive months of slowing inflation. We are not going to get upset over a figure, ”he insists in an interview with Julie Marcoux.
In addition to the rise in the price of essential goods (gasoline, housing, food), the increase in interest rates of around 28.5% suggests a difficult economic context in the coming months.
“Interest costs are higher, so there are a lot of borrowers who cannot qualify at current rates,” he says, while noting that the precarious economic situation of some American banks is prompting institutions to here to be cautious.
“There are a lot of borrowers who are variable rate and have to refinance those extra amounts of interest that they owe. This puts financial institutions in a position to be relatively cautious,” he said.
*Watch the full interview in the video above*
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