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“Richcession” explained — will it save the economy from a full-blown downturn?

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Forecasters have had an eye out for a recession for months, but it has yet to happen as the Canadian economy has proven resilient in the face of high inflation and rising interest rates.

A technical recession is often defined as two straight quarters of negative gross domestic product (GDP) growth. But the country may be facing a different type of recession as some sectors, such as tech, have been feeling the pinch.

A string of high-profile tech layoffs, including at Google Canada, Dell and Shopify, have led experts to ask – is Canada in the midst of a “richcession”?

“A ‘richcession’ occurs when the wealthy get hit more than usual. And this is uncommon because normally in a recession, we see low-income households and, to an extent, the middle class hurting a lot more, whereas for the wealthy it is just a minor inconvenience,” Tu Nguyen, economist and ESG director at RSM Canada, says.

Global’s Anne Gaviola has the details.

For more info, please go to https://globalnews.ca/?p=9875748&preview=true

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Category
U.S. & Canada
Tags
global news, recession, richession
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