Inflation in Canada declined to an annualized rate of 2.8% in February, down from 2.9% in January, according to Statistics Canada.
The February inflation reading was lower than the consensus expectation of 3.1% among economists who were surveyed by the Reuters news agency.
The Consumer Price Index (CPI) declined in February as Canadians paid less for cellular and internet services, and as grocery prices eased across the country.
However, the inflation decline was partially offset by a year-over-year increase in gasoline prices across Canada.
Core CPI, which excludes volatile food and energy prices, decreased to 2.9% year-over-year in February, down from 3.2% in January.
On a monthly basis, inflation in Canada rose 0.3% in February, up from no growth in January. Higher prices for winter travel tours and gasoline were the reasons for the monthly gain, said Statistics Canada.
Consumers who signed up for a cell phone plan in February paid 26.5% less than a year earlier, while prices for Internet access declined 13.2% year-over-year in February.
Food purchased from stores continued to see price increases ease in February. Grocery costs rose 2.4% in February from a year ago compared with a 3.4% advance in January of this year.
Month-over-month, prices for gasoline in Canada increased 4% in February from January amid higher prices for crude oil.
At the same time, Canadians paid more for winter travel tours in February, with costs rising 4.8% from January due to strong seasonal demand for travel to warm weather destinations such as Mexico and the Caribbean.
The Bank of Canada targets inflation at a 2% annualized rate. Canada’s Consumer Price Index peaked at 8.1% in June 2022 and has steadily declined since then.
