If you reduce your expenses because everything costs more, you are far from alone. Rather, those who act as if nothing had happened are in the minority.
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Inflation affects nearly three out of every four Quebecers, according to a Léger-Le Journal-TVA-QUB poll published yesterday, while 73% of people plan to cut their spending.
“Today, Quebecers are declining. Whether you are young, whether you are old, whether you are rich or poor, everyone is cutting expenses,” summarizes researcher Jean-Marc Leger.
The worst among the less fortunate
Among Quebecers who earn less than $60,000 a year, the percentage of those forced to cut back rises to 80%.
Desjardins also expects a slowdown in consumption, which will continue to increase, but at a slower pace.
However, Helen Begin, chief economist at the financial cooperative, wants to be reassuring.
“We’re not heading for a pure and simple decline in consumer spending, like what we saw in the 1990s that led to a recession,” she says.
While consumer spending jumped 6% in 2021 in Quebec, Desjardins expects it will only do so by 5% in 2022.
“It is not surprising that people adapt and change their behavior a little bit. The survey is interesting, because it allows us to know where they are going to cut back,” the economist said.
Four spending items come to the fore: Quebecers will cut back on going to restaurants or bars and cultural activities (51%), cut back on car trips (17%), buy less groceries (12%) and change their vacation plans (11%).
“We have gone from sanitary confinement to economic confinement,” explains Jean-Marc Leger.
But it’s not all bad
Helen Begin insists that if Quebecers slow down, it’s not all bad.
Yes, inflation is high, but the unemployment rate is still at 3.9%. The average salary increase has been hovering around 5.5% for several months. Employment continues to grow, and wages are rising, which helps offset a bit of a rise in inflation.”
This does not include assistance from the Quebec government with checks of $200 in January and $500 in March.
“If people, individually, have the impression that the amount is low, $500, the fact remains that $4 billion has been injected into the economy by these two measures and that this inflates income,” the Desjardins economist explains.
This is why Quebec’s savings rate is, in general, much higher than Canadians’ savings rate: 15% compared to 5%.
“There is still a lot of money in savings accounts, and many people have a fiscal cushion to limit the damage of inflation,” she summarizes.
Soft pedal on the gas
That doesn’t stop Quebecers from paying more attention to their pennies.
At more than $2 a liter, the cost of gas is of particular concern to them, with only 19% of survey respondents saying the price at the pump has no impact on their lives.
Most will reduce vehicle usage (44%) or have to cut the vehicle elsewhere to refuel (28%).
If Quebecers think more about the pump, it’s the same in the grocery store aisles.
More than half (57%) of respondents said they shop for specials more and 28% prefer home brands.
Respondents also said they were willing to cut back on meat (25%) and ready meals (19%), even on alcohol (14%) or vegetables (14%) to save money.
– In cooperation with QMI
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