OTTAWA (Reuters) – Canada’s annual inflation rate slowed to 3.4% in May, matching expectations, driven by a drop in gasoline prices, while mortgage interest costs remained high, Statistics Canada data showed on Tuesday.
Analysts polled by Reuters had expected annual inflation to drop to 3.4% from 4.4% in April. Month-over-month, the consumer price index was up 0.4%, less than forecasts of a 0.5% rise.
The annual rate, which benefited from a comparison to last May’s strong price increases, is the slowest since June 2021 and broadly in line with the Bank of Canada’s expectation that inflation would cool to around 3% by mid-2023.
Energy prices slid 12.4% in May compared with the same month a year earlier, when supply uncertainty surrounding Russia’s invasion of Ukraine led to a surge in energy prices, Statscan said.
Grocery prices continued to surge, rising 9% year-over-year in May, nearly unchanged from the increases recorded in April.
Excluding food and energy, prices rose 4.0% compared with a 4.4% rise in April.
The average of two of the Bank of Canada’s core measures of underlying inflation, CPI-median and CPI-trim, came in at 3.9% compared with 4.3% in April.
(Reporting by Ismail Shakil and Dale Smith in Ottawa; Editing by Andrew Heavens)
