Canadians are cutting back on grocery and entertainment spending as runaway inflation continues to put pressure on household budgets, according to a new Yahoo/Maru Public Opinion poll.
The survey of 1,517 Canadians found that 60% of respondents set stricter priorities and reduced spending due to higher prices in July than they did in June. Among those holding back their spending, the top categories facing cuts include dining out and ordering in (68%), followed by groceries (61%) and entertainment like movies, sporting events and entertainment. personal sports activities (55 percent).
Those living in Atlantic Canada are the most likely to cut spending, with 71% saying they are setting stricter priorities in a high inflation environment, followed by those living in Alberta (68%), in Manitoba/Saskatchewan (68%), Ontario (60%), British Columbia (59%) and Quebec (53%).
The most recent data from Statistics Canada showed the Consumer Price Index (CPI) jumped 8.1% in June, the biggest year-over-year increase since January 1983. Although the rise was largely attributable to soaring gasoline prices, price increases remained broad-based. on the basis, with seven of the eight main components calculated in the CPI increasing by more than 3 percent.
Food prices rose 8.8% in June from a year ago, and food purchased from grocery stores rose 9.4% annually. Compared to last year, the price of fresh vegetables jumped by 9.5%, that of dairy products by 8.7% and that of meat by 8%. Rising food costs have already forced a majority of Canadians to stick to basic necessities, according to a previous Yahoo/Maru Public Opinion poll.
Gas prices have since fallen from their peak in June, which was reflected in Yahoo/Maru poll data in that fewer Canadians cut gas spending in July (43%) compared to June (53%).
But even if gasoline prices moderate from previous highs, the CPI should continue to rise in the coming months. The Bank of Canada has warned that inflation will likely stay around 8% over the next few months and that further rate hikes are likely to bring soaring inflation under control.
Rising prices are worrying many Canadians, according to the survey. Nearly half of survey respondents (49%) say they are worried about the impact inflation will have on their ability to buy basic necessities, while 31% say they are comfortable with their situation (31 %) and 15% say they are panicked.
The survey of 1,514 Canadian adults was conducted between July 24 and July 25 and has an estimated margin of error of +/- 2.5%, 19 times out of 20.
Alicja Siekierska is a Senior Reporter at Yahoo Finance Canada. Follow her on Twitter @alicjawithaj.
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