Canada Inflation May 2022

Canada

Canada: Inflation in May comes in at highest level since 1983

June 22, 2022

Consumer prices rose a record-high seasonally-adjusted 1.07% from the previous month in May, picking up from the 0.88% increase logged in April. Looking at the details of the release, prices for housing and food grew at a weaker rate in May, while prices for transportation increased at a much sharper pace.

Inflation rose to 7.7% in May from April’s 6.8%. May's result marked the highest inflation rate since January 1983. Meanwhile, the trend pointed up, with annual average inflation coming in at 5.1% in May (April: 4.8%). Lastly, core inflation rose to 6.1% in May, from the previous month's 5.7%.

On the inflation and monetary policy outlook, TD Economics’ Leslie Preston said:

“We are not expecting much of a reprieve going forward. Inflation is expected to remain elevated through 2022 as outlined in our recent forecast. On the shelter side, we are likely to see a continuation of rent price increases alongside rising mortgage interest costs. This will be balanced against the impact of declining house prices. All of this re-enforces the view that the Bank of Canada will hike by 75 basis points (bps) on July 13th, following in the Fed's footsteps.”

FocusEconomics analysts project inflation to average 5.6% in 2022, which is up 0.4 percentage points from last month’s forecast. In 2023, our panel sees inflation averaging 2.8%.


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Canada Inflation May 2022

Note: Year-on-year and month-on-month variation of seasonally-adjusted consumer price index in %.
Source: Statistics Canada (SC).


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