Economists are predicting that inflation will ease to 2.1%, the lowest level since March 2021. This news comes as a relief to many, as rising inflation has been a concern for the economy in recent months.
According to the latest data from Statistics Canada, the annual inflation rate in July was 3.7%, the highest it has been in a decade. This was largely due to the impact of the COVID-19 pandemic on supply chains and consumer spending.
However, economists are now forecasting a decrease in inflation for the month of August. This is attributed to a decrease in the cost of gasoline and a slowdown in the price of food.
The Bank of Canada has also been closely monitoring inflation and has stated that it expects the rate to return to its target of 2% by the end of 2022. This is in line with the central bank’s goal of maintaining price stability and supporting economic growth.
While the decrease in inflation is a positive sign, economists caution that it may not be a long-term trend. Factors such as the ongoing pandemic, supply chain disruptions, and rising energy costs could still impact inflation in the coming months.
In addition, the recent surge in COVID-19 cases due to the Delta variant could also have an impact on consumer spending and inflation. This highlights the need for continued vigilance and flexibility in economic policies.
Overall, the expected easing of inflation to 2.1% is a positive development for the economy. It is a reflection of the resilience and adaptability of businesses and consumers in the face of challenging circumstances. As we continue to navigate through the pandemic, it is important to closely monitor inflation and make necessary adjustments to support economic recovery.
