Canadians have every right to bemoan the rising price of everything. With the European debt crisis threatening to bubble over and household debt rising to troubling levels, it now seems unlikely the the Bank of Canada will budge on interest rates until 2012 at the earliest. Which doesn’t bode well for inflation, which hit 3.3% on a year-over-year basis in April, a nearly three-year high.
But before you rustle up last year’s Christmas decorations (because who can afford a trip to the Dollar Store these days?) and throw yourself a pity party, it might be wise consider how much worse it could be. The picture doesn’t get much more grim than in Belarus, where inflation hit a whopping 32.6% year-over-year in May, following the government’s decision to devalue its currency a third in a desperate bid to quell a financial crisis.
Think your grocery bill is out of control? Here’s a glimpse of what inflation is doing to food prices in Belarus: the price of sugar, which increased by 7.6% in Canada over the course of a year, shot up by 39.1% in a single month; meanwhile, tea, which has actually seen a slight drop in Canada since 2010, is up 46.2%.
As if rising prices weren’t enough, Belarus is in trouble with neighbouring Russia, which is threatening to cut off part of its electricity and gas supplies due to embattled country’s failure to repay its debts.
All of which should offer a sobering view on Canada’s inflation problem. Still feeling sorry for yourself? Listen to this podcast, which aired on This American Life last year, about what life was like in Brazil when inflation hit 80% in one month. Food prices increased so quickly that people literally had to be one step ahead of grocery store employees, who were constantly updated the sticker prices.