August 19, 2025
RED FM News Desk
Canada’s annual inflation rate dropped to 1.7% in July, a decrease from 1.9% in June, primarily due to falling gas prices. However, according to a report released Tuesday by Statistics Canada, the cost of groceries and shelter continued to rise.
Gasoline prices were down 16.1% year-over-year, largely due to the removal of the consumer carbon price. On a monthly basis, gas prices fell 0.7%, following an increase in production from oil-exporting countries and a ceasefire in the conflict between Israel and Iran.
Groceries and Shelter Costs Climb
Despite the overall drop in inflation, Canadians saw higher prices at grocery stores, with costs rising 3.4% annually, up from 2.8% in June. This was driven by significant price jumps in confectionery and coffee products, which StatCan attributed to difficult growing conditions in producing countries. The cost of fresh grapes, for instance, increased by nearly 30%, pushing the overall price of fresh fruit up to 3.9% in July from 2.1% in June.
Shelter inflation also saw its first increase since February 2024, climbing to 3% from 2.9% in June. Rent prices grew, particularly in Prince Edward Island, Newfoundland and Labrador, and British Columbia.
The Bank of Canada is expected to analyze these inflation figures as it prepares for its next interest rate decision on September 17.
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