Canada's inflation rate remains at a record high
Consumer prices increased by 3.6% in May YoY, the consensus was 3.5%. It is the fastest pace since June 2011. In April, prices grew by 3.4% YoY. In annual terms, the pace continues to accelerate. Over the month, prices rose by 0.5% versus April. This monthly growth rate has been maintained since February 2021.
Core inflation amounted to 2.8% in May against 2.3% in April. This is the largest increase since March 2003. In April, the Bank of Canada reduced the weekly volume of asset purchases on its balance sheet from С$4 to С$3 billion, at the last meeting in June it kept the rate at 0.25%. The bank predicted a temporary spike in inflation in the summer due to base-year effects and stronger gasoline prices. The inflation target is 2%, with an inflation-control range of 1-3% per year.
Inflation trends in Canada resemble those of the United States, but in the US inflation is higher, the US headline inflation in May was 5%, core inflation was 3.8%.
Full nameDepartment of Finance Canada