TORONTO – NEWS – Canada’s annual inflation rate slowed to 1.8 per cent in February, according to Statistics Canada, though the effects of the Iran war have not yet appeared in the data.
The lower rate partly reflects a “base effect” after last year’s temporary GST tax break ended mid-February, which pushed prices higher at the time.
Food prices saw the biggest slowdown, mainly because the cost of fresh and frozen beef rose more slowly. Even so, grocery prices are still more than 30 per cent higher than they were in February 2021.
Gas prices also fell compared to the same time last year, dropping 14.2 per cent. But prices had already been rising because of higher crude oil costs and supply disruptions in some oil-producing countries.
Economists say the full impact of the war, which began at the end of February, will likely show up in March’s inflation report. Gas prices could jump by as much as 15 per cent, pushing overall inflation closer to three per cent in the coming months.
At the same time, the Bank of Canada’s main measures of core inflation — which remove things like gas prices and tax changes — moved closer to the central bank’s two per cent target in February.
