Canada’s inflation rate falls to 4.3% in March, but mortgage interest costs continue to rise
The Bank's latest forecasts predict that inflation will return to its two per cent target by the end of 2024.
In March, Statistics Canada reported that Canada’s annual inflation rate had fallen to 4.3 per cent from February’s 5.2 per cent, continuing along a downward trajectory that’s expected to bring it down to three per cent by mid-year. This slowdown is attributed to the easing of global price pressures and the higher interest rates that have been weighing on the economy. Despite the deceleration, homeowners with new or renewing mortgages are still facing high interest rates, with mortgage interest costs rising 26.4 per cent from a year ago, which is the fastest pace on record. Grocery prices continue to rise, but at a slower pace, with a 9.7 per cent increase year-over-year in March, down from 10.6 per cent in February. This deceleration was driven by lower prices for fruits and vegetables, according to Statistics Canada.
The Bank of Canada expects inflation to continue decelerating this year, but it has stated that it will not rest until inflation returns to its two per cent target. To achieve this goal, the Bank has signaled that interest rates may have to stay higher for longer. The Bank’s latest forecasts predict that inflation will return to its two per cent target by the end of 2024.
Statistics Canada also released rates for major cities in the provinces, cautioning that the figures may have fluctuated widely due to being based on small statistical samples. St. John’s, N.L., had an inflation rate of 3.6 per cent, down from 5.5 per cent in the previous month. Charlottetown-Summerside had an inflation rate of 4.2 per cent, down from 7.4 per cent in the previous month. Halifax had an inflation rate of 4.7 per cent, up from 6.3 per cent in the previous month. Montreal had an inflation rate of 5.4 per cent, down from 6.3 per cent in the previous month. Ottawa had an inflation rate of 4.8 per cent, up from 5.4 per cent in the previous month. Toronto had an inflation rate of 4.5 per cent, down from 5.1 per cent in the previous month. Winnipeg had an inflation rate of 5.4 per cent, down from 6.7 per cent in the previous month. Finally, Vancouver had an inflation rate of 4.8 per cent, down from 5.9 per cent in the previous month.
Prabhnoor Kaur