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.
- 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.
National Bank Financial
Senior Wealth Advisor