Canada’s annualized inflation rate rose to 3.2% in May as the war in Iran kept crude oil prices elevated and sent ripple effects throughout the economy.
This is the first time that inflation in Canada has been above 3% since 2023.
The Consumer Price Index (CPI) in Canada advanced from a 2.8% annualized increase in April of this year. The Bank of Canada targets inflation at an annual rate of 2%.
Higher prices for gasoline at the pumps continued to drive inflation in May, said Statistics Canada.
Excluding gasoline, inflation across Canada rose at a faster pace year-over-year in May (up 2.2%) compared with April (up 2%).
The Consumer Price Index was up 1% month-over-month in May. On a seasonally adjusted monthly basis, the index gained 0.5%.
On a year-over-year basis, gasoline prices rose 33.2% in May. That was a larger increase than the 28.6% increase seen in April.
Also contributing to May’s rise in inflation were prices for fresh fruit, which increased 5.3% from a year ago. The growth in May was mostly driven by prices for berries and grapes.
Shelter prices rose 1.7% in May after increasing 1.8% in April, while consumers also paid more for travel tours (up 0.7%) heading into the busy summer travel season.
Air transportation costs were up 7.4% year-over-year in May as airlines dealt with rising jet fuel prices.
Statistics Canada said consumer prices rose in all Canadian provinces and territories during May compared with April due to the acceleration in gas costs.
