Canada Sees Inflation Rate Dip to 2.8% Amid Unexpected Price Growth Slowdown

Written by Henrik Rothen

Mar.19 - 2024 1:52 PM CET

Photo: Shutterstock.com
Photo: Shutterstock.com
Canada Sees Inflation Rate Dip to 2.8%.

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Canada's inflation rate has decelerated to 2.8% last month, defying the expectations of many economists who had anticipated a surge in price growth. According to Statistics Canada, this unexpected ease in inflation comes amidst a backdrop of declining prices for cellular and internet services, alongside a notable slowdown in grocery price inflation.

According to CP24, February's data marks a slight decrease from January's inflation rate of 2.9%, suggesting a subtle shift in the economic pressures facing Canadians.

This development is particularly noteworthy as it represents the first instance since October 2021 where the increase in grocery prices, which saw a 2.4% rise from the previous year, has lagged behind the overall inflation rate.

Amidst these changes, the Bank of Canada's preferred core inflation measures, designed to provide a more stable view of price movements by excluding volatile items, also experienced a decline. This suggests that the underlying inflationary pressures within the Canadian economy may be starting to ease.

However, the report from Statistics Canada highlights ongoing challenges in the housing sector, with mortgage interest costs soaring by 26.3% and rent prices climbing 8.2% on an annual basis. These figures underscore the continued upward pressure on inflation from the housing market, despite the broader slowdown in price growth.

This latest inflation report offers a mixed view of Canada's economic landscape, with signs of easing price pressures in certain areas being counterbalanced by significant cost increases in others, particularly housing. As Canadians navigate these economic conditions, the unexpected slowdown in February's inflation rate provides a glimmer of hope for those concerned about the cost of living and price stability in the country.

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