A drop in gas prices and softer growth in shelter costs helped bring the consumer price index to its lowest level since January 2022
Canada’s annual inflation rate cooled more than expected in February, as a drop in gas prices and softer growth in shelter costs helped bring the consumer price index to its lowest level since January 2022, Statistics Canada data showed on Tuesday.rate dropped to 5.2 per cent in February, beating economists’ forecast that it would fall to 5.4 per cent from 5.9 per cent in January.
Month-over-month, the consumer price index was up 0.4 per cent, again lower than a forecast 0.5 per cent gain.forecasts inflation to slow to about 3 per cent by the middle of 2023, and has said it could raise rates further if evidence accumulates suggesting inflation was not declining in line with expectation.
The bank left its key overnight interest rate on hold at the 15-year high of 4.50 per cent earlier in March, and money markets largely expect it to keep rates unchanged at its next meeting in April. Statscan cited a base effect, or comparison with last year’s strong result, that should persist through June. In February 2022, prices surged at a time of Russia-Ukraine tensions and supply chain disruptions, reaching a peak of 8.1 per cent in June.
Energy prices fell 0.6 per cent on the year in February, led by the first yearly decline in gasoline prices since January 2021, while shelter costs rose at a slower pace year-over-year for the third consecutive month, Statscan said.The average of two of the Bank of Canada’s core measures of underlying inflation, CPI-median and CPI-trim, came in at 4.9 per cent compared with 5.1 per cent in January.
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