Canada’s inflation rate 6th highest among 35 developed countries

VANCOUVER—Canada’s inflation rate, projected to be 3.8 per cent for the year, is the 6th highest among a group of 35 comparable, developed countries, finds new researched published by the Fraser Institute, an independent, non-partisan Canadian public policy think-tank. “The inflation debate in Canada has largely focussed on whether it’s temporary or not, but we’ve seen very little discussion about how Canada’s inflation compares to other advanced countries,” said Livio Di Matteo, economics professor at Lakehead University, Fraser Institute senior fellow and author of Unemployment and inflation—Canada’s worrying numbers. “The truth is, Canada’s inflation is substantially higher than it is in other similar countries, and high inflation has serious impacts on Canadians.”

According to the International Monetary Fund, the average consumer inflation rate of the IMF’s 35 most advanced economies is projected to be 2.8 per cent this year, with inflation in Canada significantly higher at 3.8 per cent. The inflation rates range from a high of 7 per cent in Estonia, and 5 per cent in the United States to lows of just under 1 per cent for Switzerland and Japan. Canada’s rate is the 6th highest of the 35 countries included in the IMF’s analysis. Crucially, Canada’s unemployment rate (7.7 per cent) is also higher than the average of the 35 developed countries (6.2) and Canada’s unemployment rate is actually the 8th highest. The sum of the inflation rate and the unemployment rate is sometimes called the Misery Index because of the negative economic effects caused by high inflation when coupled with high unemployment. Of the 35 advanced countries in the IMF analysis, Canada’s Misery Index score is the 6th highest, just behind Italy, Latvia, Estonia, Greece and Spain. “For Canadians, the adage that misery loves company will be cold comfort given the higher costs of food, energy and rent that have marked the last few months,” Di Matteo said. “If high unemployment and high inflation persist, Canadians will suffer as a result and policymakers should be focused on how to reduce both quickly.” Media Contact: Livio Di Matteo, Senior Fellow, Fraser Institute To arrange media interviews or for more information, please contact: Bryn Weese, Director, Communications, Fraser Institute bryn.weese@fraserinstitute.org