Inflation forecast to continue decelerating: Conference Board of Canada report

New analysis from The Conference Board of Canada indicates month-to-month inflation in Canada has slowed to about 3 per cent on an annualized and smoothed basis and the organization expects inflation to continue decelerating in 2023.

The report said the Bank of Canada has acted aggressively to contain inflation in the past year. Their role now is to ensure Canadians understand why the moves were necessary—by doing so they can prevent pushback on interest rate increases and the assumption that inflation will be permanently higher, it said, adding that governments can contribute by limiting spending, enacting targeted inflation relief measures, and where possible, increasing the availability of goods, services, and people.

Also, businesses can play a critical role in both limiting the price increases they enact and upping their investments to increase capacity and improve productivity, said the Board.

“At present, large cost-of-living adjustments will contribute to inflation and deliver limited real gains in income. This means it will take time for people to recover their lost purchasing power. In the meantime, they can mute the impact of inflation by being more deliberate in their spending choices,” said the report.

“We currently expect inflation in Canada to decelerate over the course of 2023, and average 2.4 per cent in 2024. This will bring inflation back within the Bank of Canada’s target range and allow for interest rates to begin dropping early next year. We all have a part to play in making this a reality. If we collaborate, the inflation dragon will be slain that much sooner.”

(Mario Toneguzzi is Managing Editor of Canada’s Podcast. He has more than 40 years of experience as a daily newspaper writer, columnist, and editor. He worked for 35 years at the Calgary Herald, covering sports, crime, politics, health, faith, city and breaking news, and business. He works as well as a freelance writer for several national publications and as a consultant in communications and media relations/training. Mario was named in 2021 as one of the Top 10 Business Journalists in the World by PR News – the only Canadian to make the list)