Quebec is going through an economic slowdown, and the threat of a recession has not been ruled out; the balance sheet could also be heavier than what the Legault government announced
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This was highlighted by Jean-Sébastien Jutras, financial planner at Jutras Gestion de Patrimoine, in an interview with TVA Nouvelles.
«Eric Girard [ministre des Finances] still spoke of a statistical rate of about 50% at the level of the recession. But this is not the case for large financial institutions. They see the probability of recession much higher than 50%,” he says.
The Bank of Canada recently increased its key rate at 4.25% to counter inflation, a strategy that has consequences.
“We decided to fight inflation in the short term, but there are economic repercussions, we can see it now: the real estate component is affected, businesses are also affected, businesses that have a lot of debt, families also who have a lot of debt… all that is a repercussion of the rise in interest rates, ”explains Mr. Girard.
The recent increase in the key rate particularly affects the real estate market and generates uncertainty.
Jean-Sébastien Jutras draws a portrait of the expected situation.
“With rising interest rates there will inevitably be increases in non-payment, that’s for sure coming. Probably keys will be handed over to financial institutions. Obviously, there will be a slowdown in real estate across Quebec,” he explains.
The increases will fortunately spare fixed-rate owners, at least until the time of renewal, nuance Mr. Jutras.
Jean-Sébastien Jutras advises families to establish a budget in order to face the recession and come out of it as little affected as possible.
“There are many people in Quebec who do not plan the inflows and outflows of funds. Already there, just starting out, to make a good budget – it seems very simplistic to say – but just making a good budget can help us greatly: what I could give as advice is to take the time to analyze the inflows and outflows of funds”, insists Mr. Jutras.
Certain habits can be monitored in order to rectify a deficit trajectory.
“It is sure that, inevitably, there are expenses which sometimes are superfluous. We are in a world that is very overconsumption, so we can easily be influenced, ”laments Mr. Jutras.
Under these circumstances, credit is a particularly slippery slope.
“It’s very easy to buy on credit. And there it is still easy to buy on credit, but it costs even more. The interest that it costs me each month will have a major impact with an interest rate increase within my budget,” explains the financial planner.
Jean-Sébastien Jutras reminds us that the economy works in cycles, and that to get through this depression, you have to take the time to plan your expenses.