Statistics Canada released the consumer price index for April on Wednesday, and it confirms prices have been rising rapidly on Prince Edward Island since December.
The index, calculating the price of a representative basket of goods and services compared to one year earlier, was 143.2 in April 2021, up from 138.2 in December, an increase of 3.6 per cent in just four months.
Nationally, prices were up 3.4 per cent compared with a year ago.
UPEI economist Jim Sentance believes the quickly rising price index is an after-effect of the pandemic.
When the pandemic hit in the spring, prices in Canada and on P.E.I. fell sharply as economies were locked down. On P.E.I., where the lockdown was more stringent, it dropped more than in the rest of the country.
"In getting back to normal, we've got further to go," Sentance said of Prince Edward Island's situation.
By December 2020, the index was back to about January 2020 levels, and since then it has been climbing more quickly on the Island.
"I think to some extent, at the moment, you might also be seeing the effect of P.E.I. being a lot less locked down than provinces like Ontario and Alberta, which make up a good part of the rest of the country," said Sentance.
Sentance is not concerned that this will be a long-term trend. He believes the economy is heating up in part due to government stimulus spending, and as that spending ramps back, post-pandemic inflation will return to something closer to pre-pandemic levels.
These short-term increases, however, are hitting some sectors hard — housing in particular.
As compared to January 2020, the rental accommodation index is up 7.1 per cent on Prince Edward Island and the owned accommodation index up 4.3 per cent. Those reflect higher rents and higher real estate prices, respectively.
With residential construction at record levels, Sentance said those levels of hikes are not likely to continue, but that doesn't make it any easier for people who are dealing with those price increases right now.
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