After an unexpected surge two months ago, inflation slowed in June in the country to 2.7%, according to Statistics Canada. The price of a litre of gasoline partly explains this slowdown.
The portrait released on Tuesday by the federal statistical agency also highlights that the 1.8% contraction observed in the durable goods category has helped to slow the growth of the Consumer Price Index (CPI).
This CPI growth is slightly lower than analysts’ expectations, who were counting on 2.8%. In Quebec, inflation stood at 2.2% in June, down from 3.1% in May.
Inflation came in at 2.9% last May, surprising economists. Some wondered whether that would prompt the Bank of Canada to wait a little longer before cutting its key rate again.
It has been at 4.75% since June, when the central bank made its first rate cut since March 2020. The Bank of Canada’s next decision is expected on July 24.
Despite a broad decline in inflation last month, consumers continue to pay more for groceries. On average, food prices rose 2.1% in June, compared with a 1.5% increase in May.
“From June 2021 to June 2024, the price of food purchased in stores increased by 21.9%,” Statistics Canada points out in its report.
The inflation data comes from Statistics Canada a day after the Bank of Canada released a survey indicating that business and consumer confidence remained subdued in the second quarter – from April to June.