Canada’s annual inflation rate slowed more than expected in February
Posted March 21, 2023 6:01 am.
Last Updated March 21, 2023 6:21 am.
Statistics Canada says the annual pace of inflation cooled even more than expected last month.
The consumer price index for February rose 5.2 per cent compared with a year ago.
The result for February is lower than what was forecasted, and compares with an annual inflation rate of 5.9 per cent in January. It is the lowest annual inflation rate since January 2022.
However, B.C. is not appearing to see those same results. Stats Canada says the province’s rate of inflation was unchanged in February, holding at 6.2 per cent. In Vancouver, the rate also remained the same, unchanged from January to February at 5.9 per cent. Meanwhile, Victoria saw a bit of improvement, with a rate of 6 per cent compared to 6.5 per cent the previous month.
“The latest reading on the cost of living backs the case for the Bank of Canada to stay on the sidelines for interest rates, for the near future at least,” says CityNews senior business editor Mike Eppel.
The big contributor to the lower result is a drop off in gasoline prices. For the first time since 2021, gas prices dropped year-to-year by close to five per cent.
“Even the core reading of inflation wasn’t as high as economists had forecasted,” Eppel says. “We’re seeing a little bit of a cooling of the Canadian dollar as a result.”
The Canadian dollar is holding at just over 73 cents U.S.
Despite the overall cooling, grocery prices remained elevated and outpaced overall inflation.
Prices for food purchased from stores in February were up 10.6 per cent compared with a year ago, the seventh consecutive month of double-digit increases.
The Bank of Canada, which is working to bring overall inflation back to its target of two per cent, left its key interest rate target unchanged earlier this month at 4.5 per cent.
It was the first time the central bank kept its key policy rate on hold since it began raising it last year in an effort to cool rising prices.
With files from CityNews senior business editor Mike Eppel
