Inflation, recession fears dampen financial confidence: report

Despite the significant progress on inflation this year, almost half of Canadians are concerned that inflation will continue to rise in 2024, according to a survey from IG Wealth Management. Six in 10 respondents believe Canada is already in a recession, and two-thirds expect one next year.

The 2023 IG Wealth Management Financial Confidence Index dropped one point from last year, for a score of 50. That’s down seven points from 2021.

The dip from last year owes to a dimmer view of the economy. Preliminary data from Statistics Canada suggests a small contraction for the Canadian economy in third quarter, which would follow a contraction in the second quarter. StatsCan’s official GDP report for Q3 will be released Thursday.

Respondents’ optimism about the stability of the economy dropped to 51% in 2023 from 56% last year, IG said, and nearly one-third said governments and other institutions aren’t doing enough to address fiscal issues.

Housing affordability topped the list of concerns in terms of basic needs, cited by 62% of respondents. Another 39% were concerned about soaring food costs. More than half (56%) said the higher cost of living means they’re saving less for retirement. One in five were concerned about maintaining their standard of living in the year ahead.

Respondents with a financial advisor reported confidence levels 29% higher than those without, according to the survey.

The online survey of 2,000 respondents was conducted by Ipsos from Sept. 26 to Oct. 2.

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.