so throughout the program we will certainly have two economists on various other sets with us to totally understand what is taking place I place people who is vice head of state and chief economic expert planner at desjardins excellent night as well as clement gignac previous principal financial expert from the national bank who was a minister in quebec that is now a senator great evening clement gignac thank you quite for being with us I begin with your leaders you plan you announced that today in a financial note an economic downturn in 2023 in canada only I assume that previously the hypothesis that we may be able to achieve a soft landing, we need to note that with the determination of inflationary pressures with the beginning of a potential invasion of assumptions in household assumptions in the assumptions of services as well as with the reserve banks who have no selection but to be extremely aggressive really established to eliminate this in the sensitivity to the rate of interest that we have right here in canada and in years that we are among one of the most indebted on the planet it suggests that it will be really hard to avoid an economic crisis but we believe when also that it would certainly come it is individuals themselves the first two rates however that you have actually estimated that for the first 2 quarters in canada the quarters would certainly be unfavorable in the united states we are not yet in this situation however we can see that quarter number 1 of 2003 is down by 0.5 and quarters number by 0.8 percent so two unfavorable quarters in the initial half of the year you are just a minor tightening contrary to what we experienced in a pandemic in contrast to this that we saw in 2008 2009 it is a brief and also small-scale query resource but just the same numerous promising elements in this success wherefore there are still many individuals who anticipate it to be a relative sweetness to that usage of the labor market which is extremely tight also because of the savings gathered by houses so these variables are buoyant however it stays just the same we are going to experience a tightening in our point of view do you agree with the gignac hands yeah I agree I think as an economic expert it is to think that we will be able to combat this rising cost of living and after that go back to a target of 2% without seeing the passage with a momentum economic crisis to assure individuals of economic downturns there there are different types jimmy discussing it as a choice was really deep but very brief like that of the pandemic yen fears so deep and also lengthy exactly how 80 81 2 when I started my job besides that we gentlemen desjardins rising cost of living never past 10% so there are all kinds all kinds had regarding 2 loads economic crises given that the second globe battle however this set is an advantage in my viewpoint it will certainly be an economic crisis to type I clarify myself that is to claim that the savings will be factors that would have a decrease in GDP yet that will certainly not be the firm oath by a rise in the unemployment price because you discussed it I believe in the intervention patrick roy seldom yes to recognize that anyway past 250 thousand poor good luck with one in Quebec or 2 million canada so indeed there would be layoffs in certain sectors yet the opportunity for individuals to discover a task in ceret more tomorrow in an additional industry indicates likewise certain formations so it would not be firm by a significant rise in the joblessness price unlike previous recessions so discuss what we are discussing an economic downturn in canada in 2023 is that in quebec we are also in an economic crisis I believe that quebec is going to experience a very significant slowdown we ought to likewise see the stress on the labor market lessening is it going to be an economic downturn is showing difficult to state however the reality continues to be that we are the 2nd largest economic climate in canada if canada remains in economic downturn it is certain that it will certainly affect us is what we additionally understand that for him this surge in genuine estate that we had in toronto vancouver as a result and less discrepancy in the housing industry than what we have actually seen in the remainder of canada as well as furthermore you need to bear in mind that the government of quebec public finances are really healthy and also the federal government of quebec is quite aggressive missed out on with the upcoming political elections guarantee that we'' ll see if you ' re another simulation on the component of the federal government of quebec on the budgetary strategy so all that to make certain that eliminating greater than 50 50 the resolutions however we get on to make clear are lower in quebec than in the game this gift to the united states is what the top of inflation and also reached since essentially that'' s what we have a level of inflation that is high in a main bank who is hostile that do ivent males very rapidly the tos slowed down the economy manta clement gignac is that the peak is reached and also lastly we see the light at the end of the tunnel a descent of rising cost of living the bright side gérard what I believe the optimal of l complete inflation which includes the price of gasoline and tomorrow is gotten to however the problem is that the underlying inflation I remove instance the subject elements eliminate the power it is unclear that we have actually gotten to the top its expulsion takes the fundamental rising cost of living that have actually omitted specific unstable elements we see a velocity that has actually proceeded moderni and the guy now a lot more have a velocity of incomes that makes more complicated the battle versus inflation of the from main banks yet still we see in the international economic situation as an example others chatted so much regarding jimmy jean supply chains over the last couple of months and after that over the last couple of years it really feels like it'' s gradually being settled this entry we '' re placing oil back into the gears and transportation costs are additionally falling will it relieve rising cost of living begins to grab before it occurs transmit in the east in consumer items we need to counter numerous months a number of quarters and without a doubt in the meantime there are still risks are very significant mr gignac stated it indeed the power prices which contribute to this reaching the top of rising cost of living but we understand with the very unpredictable geopolitical context it can very easily increase once again so review what I think the stress the upside risks inflation stays extremely crucial where the dangers ultimately it does not modest as rapidly as '' we wish so and also consequently it requires the bank of canada to continue to press the accelerator of the increase in rate of interest and also magnet consequently we might go from 8% of rate inflation to 56% rather easily if the rate of oil continues to fall, but going from 5% to 2% is going to take some time, especially with an acceleration in earnings and there are architectural modifications too, in addition to the battle versus change weather conditions the carbon impact the carbon tax obligation the droughts that we can see on the side of convoys in different nations so anything yet offering in anyhow pressure from architectural variables that will make it tough for a center to make an impact 2% and also if reserve banks wish to go promptly if the risk of economic downturn king service investments will certainly decrease is that usage which is still essential in the economic situation is slowing down as well as will also decrease currently usage we are not in recession so plainly the the economy is going well we will have figures next week on the gdp we think it will come out acat adversaries for that so we are in quarter the 2nd tr fifty percent of 2022 ought to we still remain in mid-year 2022 we are still healthy, nonetheless, when we consider the home self-confidence indices it is down in the united states we have actually struck a document low in canada we see the very same pattern that we saw prior to the 2008-2009 economic downturn of a boosting Canadian confidence index when I checked out 3 4 studies as many in the united states and in canada it is around 60 to 80% of households that shows is in the procedure of decreasing their non-essential expenditures also a stressing pattern is that we see increasingly more people using credit score and also in canada it is 25% utilizing credit score to buy a house or a home however to deal with the rising price of living to see our shows in full go to the network i see her dit
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