The Premier of Quebec, François Legault, spoke this weekend, in congress, of a possible global recession. But is this recession really upon us?
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“You still have to admit it, the risks are currently numerous,” said Hendrix Vachon, senior economist at Desjardins Group, in an interview with LCN.
He explains that several factors come into play to reach the stage of economic recession.
“First, rising prices, inflation, which can force people to reduce their consumption,” he says.
Rising interest rates might also be a factor.
“There might also be continuity in the decline in the financial markets. It came back last week, but the uncertainty, the volatility might come back, ”says Mr. Vachon.
“So it’s true that currently there are several headwinds,” he adds.
While recessions are often synonymous with high unemployment rates and job losses, Mr. Vachon believes that the current labor shortage might alleviate this phenomenon.
“You have to consider currently, there is already a lot of labor shortage, so before all this shortage is over, and then, for companies, we can think that they will be more hesitant before lay off their workers, considering that they will then have more difficulty rehiring them when the economy recovers,” he said.
The economist believes that Quebec might then experience “a mild recession where the unemployment rate increases very little”.
Watch the full interview in the video above.
