Statistics Canada’s recent report revealed Canada’s annual inflation rate climbed to 2.9% in March, primarily fueled by a 4.5% surge in gas prices. Excluding gasoline, the Consumer Price Index (CPI) still experienced a notable uptick of 2.8%. Monthly, CPI rose by 0.6%, surpassing economist forecasts slightly. However, core inflation measures displayed moderation, with CPI-median at 2.8% and CPI-trim at 3.1%. This data suggests a potential interest rate adjustment by the Bank of Canada in June.
Shelter costs increased 6.5% in March and the mortgage interest cost index increased by 25.4% annually. Food prices also saw a notable uptick of 3%, driven by increases in meat and bakery products. Fresh fruit prices, however, experienced a decline of 2.5%.
Governor Tiff Macklem emphasized the importance of sustained progress in inflation control, specifically core inflation. Economists believe the latest data aligns with the bank’s core inflation criteria but anticipate one more CPI release before a decision in June.
