Canada’s inflation rate declined to 2.7% in June from a reading of 2.9% in May.
Data from Statistics Canada showed that the Consumer Price Index (CPI) declined in June due largely to a year-over-year decrease in gasoline prices, which rose 0.4% in June after a 5.6% jump in May.
Excluding gasoline, inflation in Canada rose 2.8% in June as Canadians continue to pay higher prices for groceries and other items.
Categories that exerted downward pressure on inflation in June included durable goods, which declined 1.8%, and travel tours, which fell 11.1%.
Partially offsetting those declines were higher prices for food purchased from stores, which gained 2.1%.
June was the second consecutive month that grocery prices rose across Canada. Since June 2021, prices for food purchased from stores has risen 21.9% nationwide, said the federal statistics agency.
But the biggest impact on the June inflation rate came from lower gasoline prices that decreased 3.1% on a month-over-month basis.
Across the country, inflation declined in six provinces and territories during June, with the biggest decline seen in the Northwest Territories.
The Bank of Canada targets inflation at a 2% annualized rate.
The Consumer Price Index rose as high as 8.1% in June 2022 but has steadily declined since then after the central bank aggressively raised interest rates.
In June of this year, the Bank of Canada lowered interest rates by 25-basis points. Markets anticipate further rate cuts throughout the remainder of this year and into 2025.
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