The inflation rate seems to be dropping faster here in the United States than in Canada, but according to the chief economist with one of Canada’s largest banks, looks can be deceiving.
The Bank of Canada recently held its key interest rate at five percent for the sixth consecutive time since last July. Industry response shows Canada is struggling to keep up with competition because of it. However, Beata Caranci, an official with the Toronto Dominion Bank (TD Bank) says it is hard to compare Canada and the U.S. because inflation rates are measured differently.
The Bank of Canada expects inflation to move closer to its two percent target this year, along with solid GDP growth due to increases in both population and household spending. Mike Von Massow, an ag economics professor at the University of Guelph, says, thankfully the overall price for groceries has dropped to more affordable levels, especially compared to housing and transportation.
The Bank of Canada expects the key lending rate to be dropped slightly in July.
