Inflation slows in March as food and gas price increases slow

Canada’s inflation rate was 4.3% last month, the lowest since August 2021.

Statistics Canada March Consumer Price Index Report Rise in energy, food and durable goods costs slowed last month.

However, homeowners pay much higher mortgage interest rates. Those costs rose 26.4%, the largest annual increase on record. The growth rate in February was 23.9%.

Last week, the Bank of Canada kept its key lending rate on hold at 4.5% after announcing eight consecutive rate hikes since April 2020. It will provide another update on June 7th.

Excluding mortgage interest, inflation was 3.6%.

The cost of groceries continues to rise, but not as quickly. Overall, spending at the grocery store was up 9.7% from a year ago, following a 10.6% rise in February.

The price of fresh fruit rose 7.1%, compared with 10.5% in the previous month, while the cost of buying fresh vegetables increased another 10.8%, compared with 13.4% in February.

The trip to the gas station is not that painful. Gas prices jumped a year ago following Russia’s invasion of Ukraine and the resulting uncertainty about global oil supplies. Natural gas prices fell 13.8% compared to March 2022, the second consecutive decline in these costs and the most significant year-over-year decline since July 2020.

Canada has the second-lowest inflation rate compared to other G7 countries, behind Japan’s 3.8%. Italy had the highest inflation rate in March at 7.6%. The tax rate in Germany is 7.4%. 7% in the UK and 5.6% in France. The U.S. reported inflation at 5% last month.

The April Consumer Price Index report will be released on May 16.

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