Canada's inflation rate continued rising last month, with the Consumer Price Index (CPI) increasing 6.8% on a year-over-year basis in April, according to Statistics Canada. .The year-over-year increase in April was largely driven by food and shelter prices, with gas prices increasing at a slower pace compared to the previous month. The increase overall inflation increase is only up slightly from the 6.7% increase back in March.."I think the fact that it didn't rise at the same trajectory as recent numbers is maybe indicative that those interest rate increases from a couple of months ago are starting to have a little bit of an impact," said Moshe Lander, an economics professor at Concordia University..However, Moshe cautioned that it will take months for the Bank of Canada's interest rate increases to take effect and begin pushing down inflation. "We're gonna be talking about late summer before those increases really start to have a true impact," he said..Moshe said assuming that "the world remains the way it is, which is a big caveat," the Bank of Canada will likely implement two to three more interest rate hikes in 2022. He said that would push inflation back down to 3 or 4% by the end of the year, but not without causing a "significant" economic downturn..Trevor Tombe, an economics professor at the University of Calgary, said April's inflation numbers show that "certain contributing factors are no longer accelerating in their contribution to inflation."."Important things like shelter costs for homeowners that might be done in terms of its contribution to accelerating inflation, and through the rest of this year it might start to ease off and subtract from inflation," he said..Tombe noted that Alberta's inflation rate went down in April, declining from 6.5 to 6.3%. He said this is because gasoline plays a smaller role in the province due to its fuel tax holiday..Steady oil prices could help to reduce Canada's inflation rate, Tombe said, but Russia could drive up global prices further by making good on its threat to cut off gas to several European countries..Tombe noted that food is becoming an "increasingly large as a factor driving overall inflation," due to rising fertilizer and diesel costs. He said in April's CPI, food was nearly as important as gasoline in driving up inflation.."That's new, and it makes where we go from here a little bit more difficult because food prices could very well continue their increase as a result of the Russian invasion of Ukraine," he said.
