Savings incurred by Canadians due to lower gas prices will be rendered useless because of the simultaneous weakening of the Canadian dollar, a report from TD Economics said.
Shoppers would have gained more spending money if the Canadian dollar had remained at par with the U.S. dollar. Right now, the cost of importing items has also gone up. Higher import costs mean higher price tags on items.
All this, according to the TD report, means the Canadian spender’s savings balance out to the increased cost of retail items. Based on this analysis, the report predicts a sharp decline in retail sales growth in 2015.
The report also says that the impact of slowing gas prices will be seen most significantly in provinces relying on the energy sector. TD is projecting a 2.9 per cent decline in retail sales as compared to 4.6 per cent in 2014.
