Canada Inflation Slows in February on Falling Gasoline PricesTheophilos Argitis
Canadian inflation slowed in February as consumers benefited from falling gasoline prices and a rebound in the currency tempered prices for imported goods.
The consumer price index rose 1.4 percent in February from a year earlier, down from a pace of 2 percent in the prior month, Statistics Canada said Friday from Ottawa. The core rate which strips out prices for gasoline and other volatile items fell to 1.9 percent from 2 percent.
The slowdown, which exceeded economist expectations, is in line with the Bank of Canada’s analysis that slack in the economy poses little risk of driving up inflation in the country.
The Bank of Canada had expressed concern about the slide in the currency over the prior several months along with oil prices, prompting Governor Stephen Poloz from holding off from lowering interest rates in January. That decision, on Jan. 20, halted the depreciation and fueled a rebound in the currency.
Food costs remained one of the biggest drivers of inflation in February, rising 3.9 percent from a year earlier. But that’s down from a pace of 4 percent a month earlier. Most of Canada’s fresh produce is imported through the winter. Excluding food, inflation was 0.8 percent in February.
Gasoline prices fell 6.9 percent during the month of February and were down 13.1 percent from a year earlier. Excluding gasoline, inflation would be 1.9 percent.
On a monthly basis, total inflation advanced 0.2 percent in January and the core rate -- which excludes volatile items like gasoline -- rose 0.5 percent. Economists surveyed by Bloomberg predicted that overall monthly prices would rise 0.4 percent and the core rate would gain 0.5 percent.