The annual inflation rate ticked higher in March compared with February, boosted by higher prices for gasoline, Statistics Canada said Tuesday.
The agency said its consumer price index for March was up 2.9 per cent compared with a year ago, up from a 2.8 per cent year-over-year increase in February.
The increase came as gasoline prices rose 4.5 per cent compared with a year earlier, helped higher by an increase in global oil prices.
Excluding gasoline, Statistics Canada said the overall annual inflation rate for March was 2.8 per cent, down from 2.9 per cent in February.
The Bank of Canada’s three core measures for inflation for March also all moved lower compared with February.
The central bank kept its key interest rate target on hold last week at five per cent, but said that it was “within the realm of possibilities” that it might cut rates at its next scheduled announcement in June.
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The Bank of Canada has said that it is looking for evidence that the recent easing in underlying inflation will be sustained.
Olivia Cross, North America economist at Capital Economics, said the March reading fit with the trend of downward momentum in core inflation seen so far this year.
"The bank will probably want to see the same again in the April CPI data, which will be released before the bank’s next meeting, although a modest pick-up in the average monthly gain seems unlikely to prevent a cut in June," Cross wrote in a report.
"There are still some risks to that view, most notably the potential for a much larger rise in oil prices amid an escalation of tensions in the Middle East. Gasoline prices were one of the strongest contributors to headline CPI in March, and oil prices have continued to rise in early April."
Statistics Canada said shelter prices continued to contribute to overall inflation as they were up 6.5 per cent compared with a year ago.
Mortgage interest costs in March rose 25.4 per cent on a year-over-year basis, while rent prices increased 8.5 per cent.
Food prices rose 3.0 per cent compared with a year ago, while prices for clothing and footwear fell 2.7 per cent. Prices for household operations, furnishings and equipment dropped 2.3 per cent.
This report by The Canadian Press was first published April 16, 2024
