Canada's annual inflation rate cools below forecast on cheaper fuel
TLT•Inflation cools more than expected in June
Canada's annual inflation rate cooled more than expected to 2.8% in June, data showed on Monday, as gasoline costs fell sharply after the U.S. and Iran signed their memorandum of understanding to end the war.
The war has since then flared up again in the Middle East and gasoline costs have started inching up.
The Consumer Price Index on a month on month basis decelerated by 0.4%, Statistics Canada said.
- Analysts polled by Reuters had forecast an annual inflation rate of 2.9% and a monthly inflation rate of -0.2% in June.
- Last month, the consumer price index had clocked a 29-month high of 3.2%, breaching the Bank of Canada's control range of 3% in more than two years.
- Gasoline prices were the biggest contributor to the easing in inflation rate with price of the fuel purchased at the pump falling by over 10% in June, StatsCan said. On a year over year basis, gasoline costs rose at a rate of 20.5% in June, down from a rise of 33.2% in the prior month.
- Excluding gasoline, the CPI was unchanged in June compared with May, at 2.2%, StatsCan said.
- Due to a continued increase in gasoline prices, transportation costs, which accounts for around 18% of the CPI basket, rose by in June on an annual basis.
