Fresh fruits, vegetables push up rate of inflation
OTTAWA Fuelled by climbing prices for fresh fruits and vegetables, the pace of Canada’s annual inflation rate accelerated last month to 1.6 per cent, Statistics Canada said Friday.
Inflation grew at its fastest pace in December since late 2014. Last month’s number also followed a 1.4 per cent year-over-year increase in November, the agency’s latest consumer price index found.
The figure came out as the economy deals with the effects of the steep slide in commodity and oil prices, which have also helped drag down Canada’s exchange rate. The lower loonie is expected to drive up costs for imported goods.
The report said prices for fresh fruit increased 13.2 per cent last month compared with a year earlier, while fresh vegetables rose 13.3 per cent. The price of lettuce surged 21.8 per cent.
Overall, consumers spent 3.7 per cent more on food last month than the previous year.
On top of higher produce prices, Canadians were also paying considerably more for home and mortgage insurance, automobiles and electricity compared with a year earlier, the report said.
The agency said lower prices for gasoline, natural gas and fuel oil applied downward pressure on inflation. Gasoline prices were down 4.8 per cent compared with December 2014, while natural gas decreased 12.9 per cent and fuel oil dropped by 16.8 per cent.
But the slipping price of energy slowed somewhat, which allowed overall inflation to creep up, said Dawn Desjardins, deputy chief economist for RBC.
“We all knew that there was going to be this huge weight on that headline rate because of the energy and now we’re seeing some relief from that,” Desjardins said.
“It’s kind of following the script, if you will, of what forecasters were looking for.”