Canada’s annual inflation rate slowed to 6.3 per cent in December, grocery prices stayed high

Business

Published 17.01.2023

Canada’s annual inflation rate slowed to 6.3 per cent in December, grocery prices stayed high

OTTAWA –

Canada’s annual inflation fee slowed to six.3 per cent in December as the price of groceries remained excessive and gasoline costs cooled.

In its newest client value index launched Tuesday, Statistics Canada stated Canadians continued to see costs soar at grocery shops final month in contrast with a 12 months in the past.

Grocery costs have been up 11 per cent on an annual foundation, a slight enchancment from 11.4 per cent in November, the federal company stated.

The nation’s annual inflation fee peaked in the summertime at 8.1 per cent and has been slowly decelerating since. In November, the annual inflation fee was 6.8 per cent.

Meanwhile, Canadians noticed some reduction on the pump final month, paying 13.1 per cent much less in contrast with November. Statistics Canada stated the value of crude oil dropped amid issues of a slowing world economic system.

December’s deceleration was additionally offset by will increase in mortgage curiosity prices, clothes and footwear, and private care provides and gear.

Excluding meals and power, costs rose 5.3 per cent in December on an annual foundation.

In a consumer observe, BMO managing director of Canadian charges and macro strategist Benjamin Reitzes stated although headline inflation eased, there was little enchancment in core inflation.

“While the direction of inflation is at least mildly encouraging, there’s nothing in this report to keep the Bank of Canada from hiking rates another 25 (basis points) at next week’s policy meeting,” Reitzes stated.

The Bank of Canada might be paying shut consideration to this newest inflation report because it gears up for its subsequent rate of interest determination on Jan. 25.

In addition to headline inflation, the central financial institution will even be taking a look at its most popular measures of inflation, which edged down barely final month.

The newest client value index gives the ultimate information factors for inflation in 2022. Statistics Canada stated the typical inflation fee for 2022 was 6.8 per cent, a 40-year excessive.

The common inflation fee was 3.4 per cent in 2021.

Rising power costs contributed considerably to excessive inflation final 12 months as shoppers paid 28.5 per cent extra for gasoline in 2022 on a mean annual foundation.

Though a lot of excessive inflation has been pushed by power costs, the Canadian economic system noticed a broadening of inflation pressures in 2022.

Grocery costs have been up 9.8 per cent, marking the quickest tempo since 1981.

The federal company stated costs for sturdy items have been up 6.2 per cent whereas costs for providers rose 5 per cent.

Here’s what occurred within the provinces (earlier month in brackets):

Newfoundland and Labrador: 5.7 per cent (6.7)

Prince Edward Island: 7.7 per cent (9.7)

Nova Scotia: 7.6 per cent (8.6)

New Brunswick: 6.3 per cent (7.8)

Quebec: 6.3 per cent (6.8)

Ontario: 6.0 per cent (6.4)

Manitoba: 8.0 per cent (8.5)

Saskatchewan: 6.7 per cent (6.9)

Alberta: 6.0 per cent (6.6)

British Columbia: 6.6 per cent (7.2)

The company additionally launched charges for main cities, however cautioned that figures could have fluctuated broadly as a result of they’re primarily based on small statistical samples (earlier month in brackets):