Economic Impact – Finally, a break for inflation

Capsule Aug

Please take a moment as Martin Gagnon, Executive Vice-President, Wealth Management, and Stéfane Marion, Chief Economist and Strategist at National Bank sit down to talk about the global economic situation and its impact on the Canadian market.

Here is a brief summary of the content:

  • Global economic contraction – not global recession.
  • Europe is experiencing contraction (mostly due to energy) which will be more than offset by growth in China.
  • US has experienced consecutive quarters of negative GDP growth (Textbook definition of recession).
  • Stéfane is less concerned about this because a primary cause is inventory accumulation due to expected supply issues. Moving forward, as inventories decrease to natural levels, GDP can increase without inflationary pressures.
  • Also, the old school definition of recession is no longer used by the National Bureau of Economic Research. It’s too simplistic.

Housing Market:

  • Inflation is decelerating and NB is predicting 3% rates and not 4%+
  • 67% of variable-rate mortgages have fixed payments. Reduces impact on cash flow.  (VRM are 1/3 of the mortgage market).
  • 35% of Canadian have a mortgage. Very low.


We are committed to remaining present and will continue to strive to keep our clients informed and up to date.

Best regards,

National Bank Financial

Rob Hunter
Senior Wealth Advisor