Canada’s inflation rate rose to 8.1 percent last month, with prices rising at their fastest pace since January 1983.
On Wednesday, Statistics Canada reported the 8.1 percent rate was short of forecasts it would accelerate to 8.4 percent, but it was up from 7.7 percent in May.
According to CTV News Canada, if gasoline were to be excluded from the equation, the inflation rate was 6.5 percent in June compared with 6.3 percent in May.
The data agency said gasoline was the biggest single contributor to the overall rate going up, as pump prices were up by 54.6 percent compared to the same month a year ago.
“For one of the rare times in the last two years, we’ve actually got a number that’s below expectations,” said Doug Porter, chief economist at BMO Capital Markets, reports Reuters. “The bad news is we still got the highest inflation in roughly forty years.”
Another major source of inflation this year has been food prices, which rose by 8.8 percent in the past year. That’s the same pace of increase seen the previous month, but economist Tu Nguyen with HR consultancy RSM Canada says it’s too soon to conclude that food prices may have peaked, reports CBC Canada.
“Part of that can be attributed to the fact that Canada consumes more domestically grown food in the summer, which helps keep costs down,” she said.
All in all, the Bank of Canada is probably a bit relieved that the rate came in a little lower than expected, particularly after raising its benchmark rate last week to the highest level in 20 years.
The bank is forecast to keep raising lending rates, although perhaps not as aggressively as before.
