"Canadians are poised to quickly deploy spending as the economy gradually reopens in 2021,” one bank economist writes
The previous year has been a challenging time for many because of COVID-19.
But at the end of the day, Canadian households became richer in 2020, according to economists with two of the biggest banks in the country.
RBC and TD economists say Canadians emerged with more wealth from the pandemic year. However, the other side of the coin shows that mortgage debt also increased in 2020.
RBC Economics and TD Economics released separate reports Friday (March 12) about Canadian household wealth.
Rannella Billy-Ochieng of RBC cited the following:
In the report, Billy-Ochieng noted that households possess a lot of purchasing power for the current year.
“Canadians are poised to quickly deploy spending as the economy gradually reopens in 2021,” the RBC economist wrote.
However, Billy-Ochieng also pointed out that a huge number of Canadians remain unemployed.
As of February 2021, the RBC economist noted that the unemployment rate stood at 8.2 per cent.
In a separate report, TD economist Ksenia Bushmeneva wrote that household wealth increased 3.7 per cent in the fourth quarter of 2020.
With this increase, household wealth at the end of year stood 9.3 per cent above 2019.
Bushmeneva cited the following 2020 fourth quarter numbers:
“Despite all odds, households have ended 2020 in better financial position than where they were at the start of the health crisis,” Bushmeneva wrote.
“Significant gains in asset values, payment deferrals, government income supports and a drop in consumer spending, have all helped households build significant wealth and savings cushions last year,” the TD economist added.
This story originally appeared in the Georgia Straight.