Canadian inflation hits 8.1%, highest since 1983

Gasoline rose 54.6% in 1 year in the country; the index would rise by 6.5% if fuel was excluded from the calculation

Canada’s inflation reached 8.1% in the 12 months through June, the highest level since January 1983, that is, over 39 years. The result was released this Wednesday (20.Jul.2022) by Statistics Canada. Here’s the intact of the press release (277 KB).

The price index accelerated compared to May, when it was 7.7% in the 12-month period. The statistics office said the rise was mainly due to higher gasoline prices. Excluding the item, the country’s inflation was 6.5% a year in June, against 6.3% registered in May.

Gasoline rose 54.6% in a year in the country. The high was 48% until May. In June alone, fuel increased by 6.2%. The institute said the reasons are higher global demand while there is an easing of mobility restrictions from the covid-19 pandemic in China, the biggest importer of crude oil. He said, however, that there was a slowdown in world demand in the last weeks of June related to concerns of a worsening in global economic activity.

The prices of services rose 5.2% in the 12-month period.

Canada is 8th in the ranking of highest increases in the price index among the G20 countries. Brazil ranks 4th, with inflation of 11.9% in the 12-month period up to June.

Compared to the previous month, the Canadian price index rose 0.7% in June, after advancing 1.4% in May.

7 days ago, the bank of canada surprised investors with a one-percentage point hike in the basic interest rate. It went from 1.5% to 2.5% per year. This is the largest percentage increase since 1998. The adjustment was driven by inflation. “higher and more persistent”, informed the monetary authority in a statement. Here’s the intact of the note (84 KB).