Canada’s annual inflation rate slowed to 6.3% in December
Canada’s annual inflation rate eased to 6.3 percent in December as food costs remained high and gas prices cooled.
In the latest consumer price index released on Tuesday, Statistics Canada said Canadians saw grocery store prices continue to rise over the past month compared to a year ago.
Food prices rose 11 percent on an annual basis, a slight improvement from 11.4 percent in November, the federal agency said.
The country’s annual inflation rate peaked at 8.1 percent in the summer and has been declining since then. In November, the annual inflation rate was 6.8 percent.
Meanwhile, Canadians saw some relief at the pump last month, paying 13.1 percent less compared to November. Crude oil prices fell amid concerns about a slowing global economy, according to Statistics Canada.
In addition to food and energy, December prices increased by 5.3 percent on an annual basis.
December’s slowdown was also offset by higher costs for mortgage interest, clothing and footwear, and personal care items and equipment.
The Bank of Canada will be watching this latest inflation report closely as it prepares for its next interest rate decision on January 25th.
In addition to core inflation, the central bank will also revise its favorite measure of inflation, which has eased slightly over the past month.
The latest consumer price index provides the final data points for inflation in 2022. According to Statistics Canada, the average inflation rate for 2022 was 6.8 percent, the highest level in 40 years.
The average inflation rate in 2021 was 3.4 percent.
Rising energy prices were a major contributor to high inflation last year, as consumers paid an annual average 28.5 percent more for gasoline in 2022.
Although much of the high inflation was driven by energy prices, the Canadian economy saw rising inflationary pressures in 2022.
Food prices rose by 9.8 percent, marking the fastest pace since 1981.
The federal agency said that prices for durable goods increased by 6.2 percent, while prices for services increased by 5 percent.