28 In June

Canada's Inflation Rate Slows to 2.8%, Lowest Level in Over Two Years

CPI Rose 2.8% Year Over Year in June, Following a 3.4% Increase in May

Inflation Driven by Falling Gas Prices

Canada's Consumer Price Index (CPI), a broad-based measure of inflation, rose by 2.8% year over year in June, following a 3.4% increase in May. The increase was driven primarily by falling gas prices, which offset increases in other categories such as food and shelter.

Excluding gasoline, the headline inflation figure would have been 4% in June, down from 4.4% in May. This suggests that underlying inflation pressures may be easing, which is consistent with the Bank of Canada's recent decision to pause its interest rate hiking cycle.

The annual inflation rate in Canada has now slowed for three consecutive months, after reaching a peak of 4.4% in September 2023. This decline is likely due to a combination of factors, including falling energy prices, slower global economic growth, and the Bank of Canada's efforts to tighten monetary policy.

The Bank of Canada has indicated that it will continue to monitor inflation closely and will adjust its monetary policy stance as necessary to keep inflation within its target range of 1% to 3%.

Conclusion

The moderation in Canada's inflation rate is a welcome sign for consumers and businesses alike. However, it is important to note that inflation remains above the Bank of Canada's target range, and the bank has indicated that it is prepared to take further action to bring inflation under control.