Hey folks, hope you all are doing well. In this article, I will touch base on the red-hot topic at the moment around the globe, which is Canadian inflation.
With inflation, comes the rising cost of everything.
To sum it up, Inflation is the rate at which prices for goods and services rise.
Inflation is classified into three types: demand-pull inflation, cost-push inflation, and built-in inflation. The most commonly used inflation indexes are the Consumer Price Index (CPI) and the Wholesale Price Index (WPI). In addition, Inflation can be viewed positively or negatively depending on the individual viewpoint and rate of change. Those with tangible assets, like property or stocked commodities, may like to see some inflation as that raises the value of their assets.
Inflation is a rise in prices, which can be translated as the decline of purchasing power over time. The rate at which purchasing power drops can be reflected in the average price increase of a basket of selected goods and services over some period of time. The rise in prices, which is often expressed as a percentage, means that a unit of currency effectively buys less than it did in prior periods. Inflation can be contrasted with deflation, which occurs when prices decline and purchasing power increases. – Investopedia
Before we move forward, let’s take a quick look at the Canadian inflation chart for the past 25 years.
As you can clearly notice from the above chart, over the past 25 years, i.e. since the early 2000’s Canadian inflation has never been this high (in terms of percentage at least).
Another key takeaway here is that the highest-ever inflation percentage over the last 25 years is around 4 somewhere during the 2003-2004 calendar year. So we are currently living in unprecedented times. There are no questions about that.
This year in the month of June, Inflation has reached a percentage of 8.1, which is the record highest ever. Wow! As of October 2022, inflation stands at 6.9% which is still extremely high and at never seen before levels, but much better than June at least.
Inflation percent month-wise during 2022 –
Inflation percent chart for the past 10 years –
Over the Immediate past 10 years, Canadian inflation which used to always range between 1-3% is almost at 6-8% now.
As always, with time, the inflation levels will drop back to the average range of 2-4% or even below may be. Let’s all be optimistic and continue to keep a watch in this space.
Thanks for reading, please let me know your thoughts and comments below.
Sagar Sridhar is a personal finance blogger from Canada. His genuine passion for personal finance coupled with his unique style of writing is what stands out. Professionally, he is a computer engineer, agile certified and has a master’s degree in Project Management. His writing has been featured or quoted in the leading Canadian publications such as Credit Canada and many other personal finance publications. While he is juggling between his day job and blogging, he is the main author on this blog and has miles to go before making the final pit stop.