Inflation slowed sharply to 2.9% in January as gas prices fell
The annual rate of inflation in Canada eased half a percentage point in January thanks largely to lower gas prices, Statistics Canada says.
The overall inflation rate was 2.9 per cent in January, the agency said Tuesday. That’s down from 3.4 per cent in December, when it accelerated slightly from the previous month.
Gas prices fell month-to-month for the fifth consecutive month, StatCan says. A pause to the provincial gas tax in Manitoba contributed to the decline.
Price growth at the grocery store also cooled significantly, up 3.4 per cent in January compared to 4.7 per cent in months previous. While StatCan says the cooling in food inflation was “broad-based” across aisles in the grocery store, some items including shrimp and prawns, soup and bacon saw year-over-year price drops.
The agency noted that January marked the first month-to-month decline in the overall consumer price index on a seasonally adjusted basis – the first time this has happened since the start of the COVID-19 pandemic almost four years ago.
The Bank of Canada is looking for signs inflation will continue to ease all the way to its two per cent target as it gauges when it might begin discussing cuts to its benchmark interest rate.