“The increase in family savings linked to the pandemic amounts to around 180 billion Canadian dollars, or about 5,800 Canadian dollars per person,” he said on Thursday. Lawrence Schembri, deputy governor of the Bank of Canada (BoC), Reuters reported.
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“If Canadians spend more than expected of their pandemic savings, it will strengthen the recovery in consumption and employment.”
“Canadians on average spent around CAD 4,000 less in 2020 due to the pandemic.”
“There is a lot of uncertainty about what Canadians will do with these savings, which are large enough to significantly affect the course of the economy.”
“The BoC scenario shows that if Canadians spend 15% of those savings from the second quarter of 2021 to the end of 2023, nominal growth in household spending in 2021 would increase to 5.0% from the 4.3% forecast in the January report “.
“In this scenario, much of the additional savings would be spent on transportation, accommodation and food services, boosting employment more than projected.”
“Short-term downside risks include another wave of infections, delayed launch of vaccines, or vaccines that are less effective against variants.”
“Medium-term downside risks include companies facing increasing financial stress, which could see more companies close as the recovery slows down and the economy restructures.”
“In January, the BoC projected that the economy would not fully absorb the slack until sometime in 2023, we will update our forecast in April.”
“The governing council spent a lot of time considering the signs in the most recent data; it noted that the growth of the fourth quarter of 2020 was stronger than anticipated, it also noted a growth in long-term unemployment.”
“The overall level of economic activity at the end of 2020 was almost 1% higher than we had anticipated, but the job market is still a long way from full recovery.”
“Large increases in house prices in some markets will warrant close monitoring of speculative activity.”
Market reaction
The pair USD / CAD It largely ignored these comments and was last seen losing 0.52% on the day at 1.2551.
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