Canada posts 1.7 percent annual inflation rate in July

Ottawa, Aug 19, 2025 (AFP)
Canada's annual inflation rate cooled to 1.7 percent in July, official data showed Tuesday, helped in part by falling gasoline prices.
"Lower crude oil prices, following the ceasefire between Iran and Israel, contributed to the decline," Statistics Canada said, reporting a 0.7 percent reduction in gas prices as risks of a broader Middle East war ebbed.
July's inflation was down from the 1.9 percent year-on-year increase recorded in June, when data indicated Trump's trade war had pushed prices up for certain goods, notably autos.
When Trump began imposing levies on Canada shortly after returning to office, analysts warned tariffs could send inflation soaring and force Canada's central bank to consider raising interest rates after a series of cuts.
But July's data indicated the impact of Trump's tariffs on the cost of core goods has remained muted.
Desjardins analyst Royce Mendes said "the latest inflation numbers reinforce our thesis that many tariff-related price increases occurred in March and April, earlier than the Bank of Canada has been assuming."
"More recent price readings suggest that price growth in some of those categories is now normalizing," he added.
With the inflation rate falling within a comfortable range, Mendes said it was possible the central bank could cut rates further in September, following three consecutive pauses.
Prime Minister Mark Carney said earlier this month that 85 percent of Canada-US trade remains tariff-free in both directions, as the Trump administration has maintained exemptions on goods compliant with an existing North American free trade agreement.
If Trump scraps that deal or forces major changes when it comes up for review next year, Canada's economy could face significant consequences.

Sumber : AFP