According various news sources, Capital Economics reports Canadians will feel the pinch when food inflation climbs to about five per cent this year, up from two per cent at present.
“We think this relative price shock will be temporary, as commodity prices will fall back,” said Capital Economics economist David Madani, as reported by The Globe and Mail. “Despite the pick-up in pipeline inflation, underlying inflation is likely to be contained by disinflationary pressures from excess industrial capacity, high unemployment, moderating wage growth and slower growth in broad money supply.”
