Canada's annual inflation rate slowed to 1.8% in December, driven by a sales tax break that lowered prices for alcohol, restaurant meals, and children's clothing. The rate dipped below the expected 1.9% and the previous month's 1.9%. On a monthly basis, the consumer price index contracted by 0.4%.
Canada ’s annual inflation rate slowed in December, data showed on Tuesday, helped by a sales tax break which kicked off from the mid of the month and brought down prices of alcohol, restaurant foods and children’s clothing.
On an annual basis, prices for alcoholic beverages purchased from stores declined 1.3 per cent in December, compared with a 1.9 per cent increase in November, and food purchased at restaurants dropped by 1.6 per cent in December from a rise of 3.4 per cent the previous month. The sales tax break, which impacted a tenth of the components of the CPI basket, will continue until mid-February and the month of January will see a full month of exemption versus 18 days in December, Statscan said.
The consistent easing of prices, which has stayed at or below the Bank of Canada’s target of 2 per cent since August, has helped the bank to slash its key policy rate by a total of 175 basis points from June to 3.25 per cent.
INFLATION CANADA ECONOMY SALES TAX CONSUMER PRICES
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