Canadian inflation slows to 2.8% in June

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The annualized rate of inflation slowed in June compared to the same time last year, Statistics Canada said on July 18.

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The consumer price index showed inflation fell 2.8 per cent on year-over-year basis. It rose 0.1 per cent on a month-over-month basis. The Bank of Canada’s target rate is two per cent.

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A 21.6 per cent decline in gasoline prices led the slowdown. Excluding gas prices, headline inflation would have been four per cent in June, Statistics Canada said.

Grocery prices continued to rise, however, climbing 9.1 per cent from the same time a year earlier. Mortgage interest costs rose 30.1 per cent.

In May, inflation was 3.4 per cent. That was a marked decrease from the peak in June last year of 8.1 per cent.

The Bank of Canada has forecasted inflation will remain around three per cent throughout next year, before falling to two per cent by the middle of 2025.

The central bank raised its key overnight interest rate another 25 basis points to five per cent on July 12 because some goods in the consumer price index “basket” are continuing to rise, including for meat, bread and rent, though the overall inflation rate has slowed considerably.

More to come…