“Our economy will slow down,” warns Finance Minister Chrystia Freeland

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“Our economy will slow down,” warns Finance Minister Chrystia Freeland

Canada's Finance Minister wants to be honest with Canadians so they are well prepared for the difficult months ahead.

Canadian Finance Minister Chrystia Freeland came clean about Canadians' worries about the economy at a press conference on Monday: “Our economy is going to slow down. Many people will see their mortgage payments increase. Business will no longer be as good as it has been since deconfinement. And the unemployment rate will no longer be at a historic low. »

The Bank of Canada is pressing the brakes on the economy, we are already seeing the slowdown in economic activity and it will continue, it's the case. intention. We must know the challenges ahead and we must be prepared for them.

Indeed, since March 2022, the Bank of Canada has continued to increase its key rate. The goal: to reduce inflation, which in 2022 has reached heights not seen in almost 40 years.

By raising its rate Director, the Bank of Canada encourages banks to raise interest rates and thereby discourages Canadians from spending big. Thus, demand should decrease, which will sooner or later cause prices to fall.

But until then, many people will see their mortgage payments go up, Freeland said. Business will no longer be as good as it has been since deconfinement. And the unemployment rate will no longer be at an historic rate.

“This is what will happen in Canada. This is what will happen in the United States. And that is what is going to happen in economies large and small around the world. »

—Chrystia Freeland, Minister of Finance and Deputy Prime Minister of Canada

Canadians can already see prices going up just about everywhere, for example at the grocery store or in construction.

And this situation, although temporary, will not be resolved anytime soon, warns the minister. Already, we have seen inflation drop from 8.1% in June to 7.6% in July in Canada. However, even if inflation declines over the next few months, the situation will remain difficult. Difficult for our friends. For our families. For our neighbors. And for our communities.

Despite everything, the Deputy Prime Minister of Canada is confident. This situation is temporary and, above all, Canada's economic fundamentals are really solid.

We have the lowest deficit of the G7 countries this year. The International Monetary Fund [IMF] predicts that our economic growth will be the second fastest among all G7 countries this year.

Real Gross Domestic Product (GDP) has actually experienced a slight increase of 0.1% in Canada in July, according to data released Thursday by Statistics Canada, while some economists were instead forecasting a drop in GDP of 0.1% in July in the country.

“I'm not going to pretend it won't be difficult, but Canada has the economic, social and political resources to meet this challenge. I am hopeful that Canada will make it through this difficult time.

— Chrystia Freeland, Minister of Finance and Deputy Prime Minister of Canada

And Chrystia Freeland's optimism doesn't stop there. She even foresees that this difficult period will be followed by a period of great opportunity for Canada.

A very great opportunity will arise, which happens once in a generation, and our country has every chance of benefiting from it. Canada is, she says, in a good position to exploit critical minerals and green energy, which democracies around the world want to buy.

However, until then, Minister Freeland advises Canadians to be informed and prepare for the tough economic months ahead.

With information from Madeleine Blais -Morin

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