Canadians are putting off summer vacations, new car purchases, and are becoming more strict with budgets so they can better handle higher gas and food prices and reduce their debts, according to a survey by Royal Bank.
The Canadian Consumer Outlook Index released Wednesday suggests Canadians are looking for ways to save as they grapple with gas prices that rose 29.5 per cent in May alone and food prices that grew 4.2 per cent that month.
"Canadians are continuing to focus on managing their debts - a very good sign as we enter the second half of the year," Richard Goyder, vice-president, Personal Lending, RBC said in a statement.
"It's encouraging to see consumers are trying to live within their means and seeking out very practical ways to not only pay their bills but also to save and invest."
The survey was released the same day Bank of Canada governor Mark Carney warned in a speech that agricultural product prices are up substantially since interest rates last went up, and will continue to rise.
"As we tried to explain in April, our expectation was that these food prices would come into the economy over about a six-month period. That's been the historic experience and that's exactly what's happening."
"So there's a bit more to come, given the recent rises in food. Food, unfortunately, is going to remain relatively expensive and get a little more expensive in the coming months."
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