Annual price growth has now declined for two consecutive months
Canada’s annual inflation rate was down again in August, falling to 7% as gas prices posted a noted decline.
Figures released by Statistics Canada on Tuesday showed that last month’s decrease in the inflation rate was even greater than economists, who expected the rate to hit 7.3% on average, had anticipated.
Gas prices plummeted by 9.6% in August on a month-over-month basis, although food prices saw a 10.8% spike compared with the same time last year.
The national statistics agency said that multiple factors had contributed to that surge in the cost of food including extreme weather, the Russia-Ukraine crisis, higher input costs and supply chain snarls.
StatCan’s announcement marks the second consecutive month that Canada’s inflation rate has fallen, having hit its highest rate for 40 years (8.1%) during the summer.
Core inflation – which does not account for items like food and energy – also fell compared with July, from 5.4% to 5.2%.
The news comes just two weeks after the Bank of Canada announced a fifth consecutive interest rate hike aimed at bringing inflation down, with the central bank having now increased its trendsetting rate by a full three percentage points since March.
While inflation has been the Bank’s foremost concern throughout the year to date, the news that it has fallen for two consecutive months appears to be a vindication of its rate-hiking path so far in 2022.