Inflation Falls to Lowest Level in 18 Months
Statistics Canada reported on Tuesday, April 18, that the annual inflation rate fell to 4.3% in March, which is the lowest level since August 2021. This marks a significant slowdown from February’s inflation rate of 5.2%.
The decline in global price pressures and the impact of high borrowing costs on consumer spending have contributed to the steady decrease in Canada’s annual inflation rate since last summer.
However, the Bank of Canada’s rapid rise in interest rates to cool inflation has also led to higher costs for Canadian homeowners. Specifically, mortgage interest costs increased by 26.4% in March, the largest yearly increase on record. Canadians renewing their mortgages are experiencing much higher rates than a year ago when the central bank began raising its policy rate from 0.25%.
Although March was the second consecutive month of year-over-year drops in prices at the gas pump, the relief was tied to the spike in gas prices in March 2022 due to Russia’s invasion of Ukraine. The cost of food from grocery stores increased by 9.7% in March, with fresh fruit and vegetable prices driving the slight cooling from February’s rate of 10.6%. Shoppers were finding lower prices for grapes, oranges, celery, and cucumber.
Many economists, including the Bank of Canada, predict that inflation will continue to slow in the coming months. The annual rate is forecasted to fall to around 3% by mid-year.
Google Play and the Google Play logo are trademarks of Google LLC.
