Shomporko Desk:-Canada’s inflation rate has eased back, increasing by simply 0.1 per cent in the year up to July, as lower costs for gasoline and air travel keep on hauling the number lower.
Statistics Canada said Wednesday that gasoline prices plunged contrasted with a year sooner for the fifth month straight in July, down 14.9 per cent from where they were in July 2019.
The data agency says that if gasoline were stripped out of its calculations, the annual inflation rate would have been 0.7 per cent in July. That is equivalent to June’s level. Canada’s inflation rate turned negative without precedent for just about 10 years in April and May, as COVID-19 pummeled Canada’s economy.
Those figures are all well below the range that the Bank of Canada likes to see when setting its benchmark interest rate. The bank targets inflation between one and three per cent. When inflation is below that, the bank tends to cut rates to stimulate the economy. When it’s above, it tends to raise rates to slow things down.
Gasoline was the biggest factor in the slowdown but not the only one.
Tickets for seats on airplanes were down 8.6 per cent in July compared to a year earlier, as COVID-19 wreaked havoc on travel demand. That’s the first decline in air travel seen since the price of oil plunged in late 2015, and it wasn’t the only part of travel that got cheaper.
The price of accommodation such as hotels fell by 27 per cent, Statistics Canada said.
Photo credit: Flickr / Quinn Dombrowski
News source: CBC News