From The Progressive Economics Forum:
This morning’s Consumer Price Index data reveals that the national inflation rate fell to 0.1% in May. Four provinces – Alberta, New Brunswick, Nova Scotia, and Prince Edward Island – posted negative inflation rates.
The supposed risk of continuing fiscal and monetary stimulus too long is that they could propel accelerating inflation. The Finance Minister and Bank of Canada Governor have recently begun proposing an “exit strategy” from stimulative policies. This weekend’s statement from G-8 Finance Ministers also called for “exit strategies.”
Today’s inflation numbers confirm that this talk is wildly premature, particularly as far as Canada is concerned. Our inflation rate will almost certainly turn negative before beginning to increase. Governments and the Bank of Canada have ample time to press ahead with stimulus policies before rising inflation becomes a meaningful concern.
