Design district.The inflation rate has soared by 400%! CPI surged 6.8 per cent in April from a year earlier, the highest since 1991 and higher than economists’ expectations of 6.7 per cent.Please Visit: Design district to Get Your VVIP Registration Today!
Although the main factors driving up CPI are food, housing and other areas, it is worth cautioning that inflation has seeped into every aspect, and the prices of almost everything continue to rise.
Meanwhile, Toni Gravelle, deputy governor of the Bank of Canada, confirmed his view of continuing to raise interest rates, saying borrowing costs needed to rise quickly to more normal levels to bring inflation back to target, and the current policy rate of 1 per cent was “too stimulating”.
Canada’s CPI was just 1.3 per cent in April 2020, soared to 3.4 per cent in April 2021 and doubled again to 6.8 per cent in April this year. In just two years, Canadian inflation has soared by more than 400 per cent.
Wang Xinjie, chief investment strategist at Standard Chartered China Wealth Management, told reporters that in the latest April inflation data, food and housing were significantly higher than expected, with some month-on-month decline in energy. In the face of high inflation not seen in decades, the Bank of Canada needs to implement a relatively tight policy.
Wang Youxin, a senior researcher at the Bank of China Research Institute, told reporters that under the influence of geopolitical conflicts and other factors, international commodity prices rose rapidly, driving up domestic inflation in Canada and making economic recovery more difficult. At the same time, it also raised the cost of living of consumers. In order to prevent inflation from continuing to rise, the Bank of Canada will continue to raise interest rates vigorously.
It should be noted that although Canada, the United States and other places face high inflation, the specific economic structure is not the same, and Canada, as a major commodity exporter, has a natural advantage.
In Wang Xinjie’s view, Canada itself is an important exporter of energy and food, and Canada is relatively resilient to energy and food price inflation in the face of long-term geo-conflict. In terms of data, energy and food are important components of the inflation weight, accounting for about 23 per cent of the Canadian inflation survey.
At the same time, once global commodity prices fall in the future, the impact on each country will be different. Mr Wang said Canadian merchandise exports accounted for 26 per cent of GDP, the vast majority of which came from commodity exports, compared with less than 8 per cent in the US. If oil prices fall in the future, it will be very good for energy importers. But for Canada, a big commodity exporter, falling prices can curb inflation on the one hand, but on the other hand, it will be a drag on the Canadian economy and even the Canadian dollar.
Overall, under the influence of geographical conflicts, epidemics and other factors, inflation “high fever” will be maintained for a long time. Douglas Porter, chief economist at the Bank of Montreal, predicts that inflation is spreading more widely and is hard to dispel. The worst is not expected yet, and Canadian inflation will still exceed 6 per cent by the end of the year.