Latest figures mark the largest yearly increase since 1983
The inflation rate in Canada rose once again in June, climbing 8.1% over the same month last year in its biggest yearly increase for almost 40 years.
Inflation figures released by Statistics Canada on Wednesday indicated that the measure had posted its most noteworthy year-over-year gain since January 1983, with the national statistics agency saying gas price increases were the main factor behind the growth.
Gas prices skyrocketed by over 54% compared with June 2021, StatCan said, meaning that the inflation rate would actually be significantly lower – about 6.5% – if gasoline was excluded.
The news came as little surprise following Bank of Canada governor Tiff Macklem’s remarks on Thursday that inflation would hit “a little over” 8% in the next announcement.
Indeed, many economists had believed the rate could come in even higher, with a group recently polled by Bloomberg expecting a year-over-year increase of 8.4%.
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Last week, Canada’s central bank increased its benchmark rate by a full percentage point in a surprise move, saying in remarks accompanying the news that inflation was “higher and more persistent” than it had envisaged as recently as April.
“While global factors such as the war in Ukraine and ongoing supply disruptions have been the biggest drivers, domestic price pressures from excess demand are becoming more prominent,” the Bank said.
It indicated that it expected inflation to start decreasing later in 2023, returning to a level of around 3% by the end of next year and meeting the Bank’s target of 2% by the end of 2024.
