Inflation continued to decelerate in May, with the Consumer Price Index falling from 4.4% in April to 3.4%, its lowest level in two years.

Month-on-month, prices rose 0.4% in May, after rising 0.7% in April. In Quebec, the monthly increase reached 0.7% and inflation reached 4% at an annual rate.

“The slowdown in growth was largely attributable to lower gasoline prices (-18.3%) year over year, caused by a year-on-year effect. Excluding gasoline, the CPI rose 4.4% in May after rising 4.9% in April,” says Statistics Canada.

Inflation growth is slowing, but prices remain high, Statistics Canada notes, because the annual slowdown in the CPI is mostly due to last year’s baseline, when prices soared.

Grocery prices continue to rise at an annual rate of 9%, more than twice as fast as the CPI. Grocery products with the largest year-over-year increases include edible fats and oils (20.3%), bakery products (15.0%) and grain products (13.0%). 6%).

Growth in prices for food purchased from restaurants accelerated slightly year-over-year in May (6.8%) compared to April (6.4%), amid a labor shortage. labor as well as high input costs and expenses persist, says Statistics Canada.

The cost of mortgage interest is a major factor behind the annual price increase in May, according to Statistics Canada. “This index rose 29.9% year over year in May, after rising 28.5% in April. For a third month in a row, the index posted the largest increase ever, as Canadians continued to renew or take out mortgages at higher rates.”

The composition of the Consumer Price Index has just been reassessed by Statistics Canada and the month of June is the first to reflect it. The weight of food and gasoline is larger in the index weighting, while the cost of housing is a little less heavy, which reflects the cooling of the real estate market due to the increase in interest rates .