Canada experienced its lowest inflation rate in excess of two years to 2.8%, and the sharp drop in the gasoline price being the most significant reason for the decline compared with last year, indicated by Statistics Canada, bringing down the official inflation rate to its lowest level since March 2021.
The price of gasoline indicated a 21 percent drop during the month than they were in the similar month last year.
Telecommunication services has also contributed to the dampening of the increase in the cost of living, falling by 14.7 percent compared to the previous year. The drop is the result due to the dip in prices for promotional pricing and cellular data plans, informed by Statistics Canada.
An influx of offers given by the telecom Giants, a result from Rogers finalizing its acquisition of its rival Shaw. The price for internet access reduced by 3.2 percent last year and the biggest one – month dip since 2019 experienced in June with a drop by five percent, the data agency noted. It further stated that the reason is mostly due to the lower prices in Quebec and promotions in Ontario.
On the other side of the fence, mortgage and food expenses were the single biggest factors sliding the rate higher. A continuous increase in the cost of food by excess of nine percent, with statistics showing that the price of food has increased by almost 20 percent in the past two years, the fastest pace of increase experienced in more than 40 years.
An economist at the Royal Bank of Canada Claire Fan, stated, although experienced with a stubborn high, there are reasons to believe that food prices may soon decline due to the dissipating effect of the factors that caused them to spike in the first place. The statement indicates that the domestically added burden on food prices are taking longer to decrease, but eventually will come down and will continue to.
Senior economist with CIBC Andrew Grantham, informs it wouldn’t be a surprise to witness the official inflation rate to inch higher in the months to come, making it less favorable compared to figures from last year.
