March saw a rise in annual inflation rate to 2.9 percent due to increase in gasoline prices

The annual inflation rate increased in March compared to February, driven by higher gasoline prices, as reported by Statistics Canada on April 12.

The consumer price index for March rose by 2.9 percent year-over-year, up from 2.8 percent in February.

This rise was mainly due to a 4.5 percent increase in gasoline prices compared to the previous year, supported by a rise in global oil prices.

Excluding gasoline, the overall annual inflation rate for March was 2.8 percent, slightly lower than February’s 2.9 percent.

The Bank of Canada’s three core measures for inflation in March all decreased compared to February.

While keeping the key interest rate target steady at five percent last week, the central bank hinted at the possibility of a rate cut at its next announcement in June.

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The Bank of Canada is monitoring for sustained evidence of the recent slowdown in core inflation.

Capital Economics’ North America economist, Olivia Cross, stated that the March figures align with the ongoing decline in core inflation observed this year.

She believes that a modest increase in the average monthly gain in April’s CPI data is unlikely to prevent a rate cut in June.

There are potential risks to this outlook, particularly a notable rise in oil prices due to escalating tensions in the Middle East.

Shelter prices, mortgage interest costs, and rent prices in March contributed to overall inflation, with increases of 6.5 percent, 25.4 percent, and 8.5 percent respectively.

Food prices rose by 3.0 percent year-over-year, while clothing, footwear, household operations, furnishings, and equipment saw decreases.