Canada’s one-year inflation rate again broke records in June and reached 8.1%, its highest level since 1983, due to rapidly rising gasoline prices, the public body Statistics Canada (EC).
On July 13, the Bank of Canada was already forecasting that inflation would exceed 8% and warned that it would stay at these levels for the next few months.
The Canadian monetary authority surprised last week with a 1 point hike in interest rates, the fourth consecutive hike that left the index at 2.5%, in an attempt to contain runaway inflation.
The Bank of Canada has expressed concern that the economy is stuck in a cycle of high inflation and has reduced growth in the economy to 3.5% in 2022, 1.75% in 2024 and 2 .5% in 2024.
The central bank also warned that its main objective is to contain inflation, which is why it plans to maintain strong interest rate hikes until growth is subdued.
Statistics Canada pointed out that if gasoline prices in June, which were 54.6% higher than the same month in 2021, were excluded, inflation would stand at 6.5%.
Despite the sharp rise in inflation in June, economists noted that it was slightly lower than the expected rise of 8.4%.
Another reason for optimism was the slowdown in the rise in food and housing prices.
Excluding energy and food, the rise in underlying inflation from May to June was 0.4%, the lowest figure for months.
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