in ,

Trudeau government spending is worsening inflation crisis says Scotiabank

Trudeau government spending is worsening inflation crisis says Scotiabank

A Scotiabank investors report decries the Trudeau government’s lack of action in reducing government spending, forcing the Bank of Canada (BoC) to hike interest rates. 

According to Bloomberg News, Scotiabank economists have published a report arguing that the burden of lowering inflation is falling on the private sector as the federal government continues to spend at high levels.

In recent months, the BoC has hiked up interest rates in an effort to minimize the growing inflation crisis in Canada.

“The output losses that the BoC must engineer to rein in inflation are falling disproportionately on the private sector,” said the report. 

At the beginning of June, the BoC increased the benchmark interest rate to 1.5% and is expected to increase the rate by 0.75% the next time the central bank meets. 

The report argues that if the government reduces government spending, it will allow the central bank to keep interest rates lower.

“Less government consumption would lead to a lower path for the policy rate and take some of the burden of adjustment away from the private sector,” the report reads.

In recent weeks, the Trudeau government has not expressed the desire to limit government spending – despite touting “fiscal restraint,” minister of finance Chrystia Freeland announced a $7 billion spending plan in order to ‘combat’ inflation. 

The Trudeau government spent more money than any government in Canadian history, creating a $327.7 billion deficit in the fiscal year 2020/21 and a projected $144.5 billion deficit for the fiscal year 2021/22. 

The inflation crisis has resulted in higher prices for various essentials like gasoline, cars, groceries, lumbar and more. 

A May Angus Reid survey found that half of Canadians are struggling to feed their families, and a Mainstreet Research survey found that 25% of Canadians are eating less amid Canada’s inflationary spiral. 

Worries that the economy will fall into a recession stem from concerns that the interest rate hikes from the BoC will have undue harm on businesses – leading to mass unemployment.

According to a Maru Public Opinion poll, most Canadians believe that if we aren’t already in a recession, we are close to it.

8ec61c35f48ce7f1a8b65c561a88346d?s=150&d=mp&r=g | Trudeau government spending is worsening inflation crisis says Scotiabank | The Paradise News

| Trudeau government spending is worsening inflation crisis says Scotiabank | The Paradise News

We’re asking readers, like you, to make a contribution in support of True North’s fact-based, independent journalism.

Unlike the mainstream media, True North isn’t getting a government bailout. Instead, we depend on the generosity of Canadians like you.

How can a media outlet be trusted to remain neutral and fair if they’re beneficiaries of a government handout? We don’t think they can.

This is why independent media in Canada is more important than ever. If you’re able, please make a tax-deductible donation to True North today. Thank you so much.

donate | Trudeau government spending is worsening inflation crisis says Scotiabank | The Paradise News

Source: TNC.

Kim Sejeong, Choi Daniel, Nam Yoon Su, And More Test Chemistry At Script Reading For Upcoming Drama

Kim Sejeong, Choi Daniel, Nam Yoon Su, And More Test Chemistry At Script Reading For Upcoming Drama

Live updates: More than 30 firefighters tackling ‘severe’ fire at former Walsall care home

Live updates: More than 30 firefighters tackling ‘severe’ fire at former Walsall care home