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Growing share of Canadians plan to further cut, postpone purchases: survey 2023/1/17 source: Print

OTTAWA, Jan. 16 (Xinhua) -- A growing share of consumers plan to continue reducing their spending or to postpone purchases because of elevated inflation and interest rates, Bank of Canada said on Monday.

This is particularly the case for those with variable-rate mortgages or other debt who are feeling the pinch of higher interest rates, the central bank said, announcing the results of Canadian Survey of Consumer Expectations in the fourth quarter of 2022.

Most often, consumers are curbing spending on discretionary items, such as recreational services, to be able to pay for necessities. They may also delay or cancel larger purchases. For example, some consumers are delaying buying a vehicle, the central bank said.

This survey took place between Oct. 27 and Nov. 17, 2022. Follow-up interviews took place in November and December 2022. During interviews, one said, "With 8 percent interest rates for a car loan, interest rates will need to come down or my wheels will come off."

In response to high inflation and rising interest rates, consumers have reduced their purchases of a broad range of goods and services, the survey showed.

High food prices are a particular source of frustration for households. In a follow-up interview, one survey respondent said, "I spend a lot of money to buy little things."

In addition to reducing spending on groceries and other goods and services, consumers report changing their buying habits, such as choosing less expensive brands, buying in bulk and looking for discounts. One respondent said, "I am spending more cautiously."

Canada's Consumer Price Index peaked at 8.1 percent year over year in June and stayed as high as 6.8 percent in November last year. 


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