The state of Canada’s economy is becoming a growing concern among residents in that country, according to a poll from one of its “Big Five” banks.
“COVID-19’s (coronavirus) impact on the economy is causing many Canadians to worry about the future,” a release from the Canadian Imperial Bank of Commerce (CIBC) stated.
In the CIBC’s Financial Priorities Poll, 79 per cent of respondents expressed concerns about a sustained recessionary period into next year. This represented an increase from 55 per cent of people polled in December who feared an economic downturn.
In fact, CIBC assumes that worries over the economy could be causing Canadians to reconsider their personal financial situation. As many as 63 per cent of respondents indicated that they have reduced spending on unnecessary items, while 55 per cent believe they need to get a better handle on their finances this year.
“It’s understandable that Canadians are worried about the economy and are feeling uncertain about the impact on their ambitions, but this is a time when good financial advice conversations are most valuable, including assessing your overall situation, looking at opportunities to improve cash flow, and adjusting your financial plan if necessary,” Laura Dottori-Attanasio, group head, Retail and Business Banking, CIBC, opined.
“It’s a positive sign that many Canadians are taking a responsible approach to the situation by making changes to their spending and working to limit unnecessary debt. Good cash flow management now can help you through the current situation, and over the longer term free up funds to divert towards savings or other goals,” she continued.
The survey found, in addition, that 46 per cent of Canadians blames the economic impact of the pandemic for adversely affecting their finances and a similar number (47 per cent) believes it will take them more than a year to get back on track with their personal finances.
To this end, Canadians are prioritising building an emergency fund in 2020, citing this as a top goal for the remainder of the year, followed by steering clear of adding on debt. Of the 22 per cent of respondents who’ve had to borrow more in the past 12 months, the number one reason was for day-to-day items (38 per cent) followed by a loss of income (28 per cent).
“The impact of the pandemic will be felt by Canadians for some time. While we have a long way to go to get back to a normal economy, taking charge of your finances now with a savings and debt management plan is an important step towards putting your personal finances back on track,” Dottori-Attanasio pointed out.