In January, Canada inflation rate dropped to 2.9%, although the growth of grocery prices was slower.
Ottawa — Last month, Canada’s annual inflation rate fell to 2.9%, showing a steeper slowdown in price rise than economists projected.
According to Statistics Canada’s consumer price index data, the major contribution to the fall was a year-over-year drop in gasoline costs.
In December, the annual rate of Canada inflation was 3.4%
With price rise slowing down in five of the eight components of the consumer price index, including food, Tuesday’s data presents consumers with a number of good news.
January saw a 3.4% annual increase in grocery costs, up from a 4.7% increase in December.
Positive indicators for the Bank of Canada also include the most recent data, which indicates that underlying price pressures are lessening and that the headline rate is returning to the central bank’s target range of one to two percent.
The central bank’s fundamental inflation metrics, which exclude price volatility, also dropped in January.
Prices dropped in January for the first time since May 2020, adjusted for seasonality.
The half-point drop in headline inflation comes following a period of price volatility, which has added uncertainties to the timing of rate decreases.
The central bank, which has held its main interest rate at 5%, has indicated that its next move will most likely be a rate drop.
But, before it pulls the trigger, the Bank of Canada has stated that it requires further proof that inflation is returning to its two percent objective.
Here’s the events in the provinces, with the preceding month in brackets
— Newfoundland and Labrador: 2.5 per cent (3.4)
— Prince Edward Island: 1.6 per cent (2.6)
— Nova Scotia: 3.0 per cent (3.6)
— New Brunswick: 2.3 per cent (2.9)
— Quebec: 3.3 per cent (4.0)
— Ontario: 2.7 per cent (3.4)
— Manitoba: 0.8 per cent (1.7)
— Saskatchewan: 1.9 per cent (2.7)
— Alberta: 3.4 per cent (3.0)
— British Columbia: 3.0 per cent (3.4)
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