MONTREAL, July 19 ― Inflation declined last month in Canada to its lowest rate since March 2021, even though grocery prices rose sharply again, the government reported yesterday.

The consumer price index rose by 2.8 per cent in June, down from 3.4 per cent in May, Statistics Canada said. The rate spiked a year ago in June 2022 to 8.1 per cent.

"While deceleration was fairly broad-based, another base-year effect in gasoline prices led the slowdown in the CPI,” the agency said.

Gasoline prices fell 21.6 per cent year over year in June following an 18.3 per cent decline in May.

Excluding gasoline, headline inflation would have been 4.0 per cent in June, following a 4.4 per cent increase in May.

Grocery prices rose 9.1 per cent in June.

"The latest projections from the central bank suggest a very gradual deceleration in price growth, with inflation not reaching 2 per cent until mid-2025 ― two years from now,” said Royce Mendes, an analyst at the bank Desjardins, who said he does not rule out a rise in the coming months.

Transport Minister Omar Alghabra tweeted: "Good news: Canada's inflation rate drops to 2.8 per cent, which is lower than most comparable countries in the world, lower than the US, Japan, France, UK, and Australia to name a few.” ― AFP