Statistics Canada reported on Tuesday that the annual inflation rate increased to 2.9% in March, driven by a rise in gasoline prices. Compared to February’s 2.8% year-over-year increase, this marked a slight uptick.
Gasoline prices saw a notable 4.5% increase from a year earlier, largely influenced by higher global oil prices. Excluding gasoline, the overall annual inflation rate for March was 2.8%, a slight decrease from February’s 2.9%.
The Bank of Canada’s core inflation measures for March all decreased compared to February. While the central bank maintained its key interest rate target at five percent last week, it hinted at the possibility of rate cuts in June.
Olivia Cross, North America economist at Capital Economics, noted that the March inflation reading aligns with the downward momentum in core inflation observed this year. She anticipates a similar trend in the April CPI data, possibly leading to a rate cut in June, barring any significant rise in oil prices due to escalating tensions in the Middle East.
Shelter prices, including mortgage interest costs and rent prices, continued to contribute to overall inflation, rising by 6.5% and 25.4% year-over-year, respectively. Food prices also increased by 3.0%, while clothing and footwear prices fell by 2.7%. Additionally, prices for household operations, furnishings, and equipment dropped by 2.3%.
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