Inflation in Canada falls to 7.6% in first monthly decrease in a year
Canada’s inflation rate fell to 7.6 per cent in July, according to a report Tuesday from Statistics Canada, marking the first time in 12 months that the rate has decreased from the previous month.
In June, inflation hit a 39-year high of 8.1 per cent, with gasoline prices the single biggest contributor to the overall rate increase.
By contrast, gasoline prices declined on a monthly basis in July, according to the agency’s Consumer Price Index. Consumers paid 9.2 per cent less for gasoline in July than they did in June, a monthly decline not seen since April 2020.
Ontario saw a 12.2 per cent monthly decline in gas prices — the largest of any province — after the provincial government implemented a gas and fuel tax cut on July 1.
The overall downward trend, which was expected by economists, indicates that skyrocketing inflation is starting to ease up. But it’s still a long way from the Bank of Canada’s 2.2 per cent target.
Groceries rise at fastest pace since Aug. 1981
Even as the cost of gas declined, prices at grocery stores rose at 9.9 per cent year-over-year, their fastest pace since Aug. 1981.
Bakery products, non-alcoholic beverages, eggs and fresh fruit are among the items seeing faster price growth. Baked goods in particular are up 13.6 per cent as the Russian invasion of Ukraine has contributed to surging wheat prices.
Higher prices for services like flights, restaurant meals and hotel stays were notable contributing factors to the month-over-month increase due to a busier travel season.
Monthly rent is going up, too, according to the StatsCan report. With high interest rates sidelining buyers who can’t afford to take out mortgages, the rental market has expanded and rent prices are accelerating at a faster pace than in June.