"Consumer confidence continues to slide largely on pessimistic views on the future strength of the Canadian economy"
- Nik Nanos, chairman of Ottawa-based polling firm Nanos Research Group
Consumer morale in Canada declined to the lowest level since May 2013 amid speculation the country's economic outlook is deteriorating. The Bloomberg Nanos Canadian Confidence Index fell to 56.0 in the week ended February 7, down from 56.6, marking the forth straight decline. Falling optimism was noticed in every province except Quebec and across all age groups except 18-29 years and those older than 60. Sticky inflation, a widening trade deficit and the worst-performing Canadian Dollar among G-10 currencies this year are influencing the perception that Canada is immune to the global slowdown. Last week Bank of Canada Senior Deputy Governor Tiff Macklem said that the nation's economy slack, retail competition and anemic global prices for food and energy are the main reasons for inflation remaining below the central bank's goal.
However, Deputy Governor John Murray said that Canada's economic growth should become more broad-based on the back of the U.S. led strengthening of the global economy and a weaker currency. In addition, he indicated that the nation's economy is still adjusting to the financial crisis shocks and higher commodity prices that Canada exports, and argued that 2% inflation target will be reached within two years.
© Dukascopy Bank SA