As inflation inches closer to 3%, economists warn progress will stall this year

As inflation inches closer to three per cent, economists are warning the steady monthly declines in annual price growth will stall and even potentially reverse in the second half of the year.

Statistics Canada is set to release its consumer price index report for June next week, and forecasters are anticipating the annual inflation rate fell from 3.4 per cent in May.

"We're expecting a deceleration to three per cent year-over-year. And that's really mainly because the gasoline prices we're paying today are being compared with the very peaks of what we saw last year," said Andrew Grantham, an executive director of economics at CIBC.

But inflation isn't expected to fall much further this year, making the journey back to the two per cent target a long and tumultuous one.