Canada’s annual inflation rate rose to 3.2 per cent in May, up from 2.8 per cent in April, according to Statistics Canada. Higher gas prices were the main reason for the increase, as fuel costs jumped 33.2 per cent compared with a year earlier. The rise was linked to an oil shortage caused by the conflict in Iran.
Food prices also continued to climb. Fresh fruit prices increased 5.3 per cent, while fresh vegetables rose nine per cent. Tomato prices surged 45.2 per cent because of poor weather and lower production in Mexico, partly due to U.S. tariffs. Grocery prices overall were up 4.3 per cent from a year ago.
Computer equipment prices also increased as demand for parts used in artificial intelligence systems strained supplies. Meanwhile, shelter costs rose more slowly, helping to offset some of the increases in other areas.
Economists had expected inflation to reach three per cent. While some measures of core inflation remained close to the Bank of Canada’s two per cent target, analysts said the continued rise in food prices remains a concern.
