Annual Canadian consumer inflation rate surges 2.7 percent last month
Date
7/17/2024 3:57:15 AM
(MENAFN) In June, Canada's annual consumer inflation rate registered at 2.7 percent, a decrease from the 2.9 percent year-on-year increase reported in May, according to data released by the country’s statistical authority on Tuesday. This figure reflects a significant reduction compared to the 8.1 percent annual inflation rate recorded in June 2022, which marked the highest level for the consumer price index (CPI) in 39 years.
The slowdown in inflation was primarily attributed to a deceleration in gasoline prices, which increased by only 0.4 percent in June following a much larger rise of 5.6 percent in May. Statistics Canada noted that this monthly decrease coincided with an announcement from the Organization of the Petroleum Exporting Countries and its partners (OPEC+) regarding a gradual phasing out of voluntary production cuts later this year. Additionally, some refineries resumed production after spring maintenance shutdowns. The overall consumer price index fell by 0.1 percent in June, reversing a 0.6 percent increase from May, despite expectations for a slight monthly gain of 0.1 percent.
The decline in prices was significantly influenced by lower costs for travel tours, which plummeted by 11.1 percent, along with a 3.1 percent decrease in gasoline prices. Furthermore, Statistics Canada reported that prices for durable goods continued to decline on an annual basis, dropping 1.8 percent in June after a 0.8 percent decrease in May. The index for passenger vehicles was a major contributor to this decline, falling 0.4 percent year-over-year, representing the largest annual decrease since February 2015. Additionally, furniture prices decreased by 3.9 percent annually, partially due to easing supply chain issues.
The agency also pointed out that higher interest rates are influencing consumer spending patterns, leading many to cut back on discretionary purchases and delay big-ticket items. This shift in behavior may be contributing to lower demand, which in turn is resulting in lower prices across various sectors.
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