WAR IN UKRAINE TAKING IT'S TOLL ON CANADIAN SAVINGS!

Mounting inflation and geopolitical turmoil will take a large chunk off the savings that Canadians have hoarded during COVID-19, RBC Economics warned.

“Household purchasing power is unusually strong. Canadians socked away a stunning $300 billion in excess of pre-pandemic saving levels over the last two years. That amounts to more than 11% of annual Canadian GDP, or six times the amount of pre-pandemic annual spending on gasoline,” RBC said.

The far-reaching economic shockwaves of the Russian invasion of Ukraine – particularly in the energy, metal, and agricultural commodity sectors – cannot be understated, RBC said.

“An increase in consumer prices and financial market volatility will weigh on confidence globally; the S&P 500 is already down more than 10% this year,” RBC said. “And as the surge in prices boosts revenue for producers of those commodities – including in the Canadian oil and gas and agricultural sectors – it will also eat into the stockpile of household savings built up during the pandemic.”