Canada inflation rate has slowed down in March 2023, falling to 4.3% from 5.2% in February and to its lowest level since August 2021.
Furthermore, the Bank of Canada predicts that the rate will reach 3% in few months. Bank of Canada is eyeing at 2% inflation by end of 2024.
The CPI increased by 0.5% on a monthly basis in March after increasing by 0.4% in February. The largest month-over-month change was led by travel tours (+36.7%).
This was primarily fueled by higher seasonal demand during the March break. The CPI increased 0.1% on a monthly basis after season adjustment.
For the second straight month, gasoline prices decreased year over year in March (-13.8%), the biggest annual loss since July 2020.
March had a slower rate of increase in food costs year-over-year (+9.7%) compared to February (+10.6%), with the decrease being attributed to lower prices for fresh produce.
After rising by 10.5% in February, fresh fruit prices jumped by 7.1% year over year in March. The most significant factor in the slowing was the price of grapes and oranges.
Similar to how fresh vegetable costs decreased year over year in February (+13.4%), they did so in March (+10.8%), mostly due to the cost of celery and cucumbers.
Price rise for durable goods decreased in March (+1.6%) compared to February (+3.4%) on a year-over-year basis. After rising 7.2% in February, furniture prices had a 0.3% year-over-year decline in March, leading the slowdown in prices for durable goods.
The price of furniture increased 8.2% month over month in March 2022 despite supply chain concerns, therefore the drop was mostly the result of a base-year impact.
Along with prices for durable goods, prices for passenger cars also slowed down, rising at a slower rate in March 2023 (+4.7%) compared to February (+5.3%).
Due to the global scarcity of semiconductor chips, higher passenger vehicle costs in March 2022 exerted negative pressure on the index in March 2023.
New Canada Inflation Data – March 2023
Latest Province-Wise Inflation Data
|Geography||February 2023 (Year-on-Year)||March 2023 (Year-on-Year)|
|Newfoundland and Labrador||5.4%||3.4%|
|Prince Edward Island||6.7%||3.9%|
Latest Item-Wise Canada Inflation Data
|Items||March 2022 to March 2023 |
|February 2023 to March 2023 |
|Household operations, furnishings and equipment||3.3%||0.4%|
|Clothing and footwear||2.4%||1.3%|
|Health and personal care||6.5%||0.5%|
|Recreation, education and reading||1.6%||1.1%|
|Alcoholic beverages, tobacco products and recreational cannabis||5.4%||0.9%|
What is CPI – Consumer Price Index?
The Consumer Price Index (CPI) reflects price increases that Canadian consumers are subject to. It calculates price change by comparing the price of a set basket of goods and services across time.
The eight main components of the CPI basket of goods and services are as follows: Food, shelter, household tasks, possessions, and tools, clothing and footwear, transportation, health and personal care, leisure activities, education, and reading, as well as alcoholic drinks, tobacco products, and marijuana used recreationally.
A variety of geographic levels, including Canada, the 10 provinces, Whitehorse, Yellowknife, and Iqaluit, are covered by the publication of CPI statistics.
What is inflation?
The rate at which prices grow over a specific time period is known as inflation. Inflation is often measured in broad terms, such as the general rise in prices or the rise in a nation’s cost of living.
How the inflation is measured with CPI?
Inflation is measured by the percentage change in the CPI.
1. The 12-month percentage change contrasts current prices with those from the same month the previous year, for instance, March 2020 vs March 2019.
2. A calendar year’s worth of months, from January to December, make up the annual average.
Statistics Canada bases its pricing measurements on a base year. The value of the basket in this base year is set at $100.
A $100 basket of goods and services in the base year of 2002 would cost around $140 in the year 2020. The $40 increase is due to inflation.
What is Canada inflation rate now?
4.3% is the Canada inflation rate as of March 2023 which cooled from 5.2% in February 2023.