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Canada's Annual Inflation Drops to 2.3% in March, Core Inflation Remains High

Lower gasoline and travel prices contributed to the slowdown, but persistent core inflation complicates the Bank of Canada's upcoming monetary policy decision.

A view of East Hastings street in Downtown Eastside of Vancouver, British Columbia, Canada January 31, 2023. REUTERS/Jennifer Gauthier/File Photo
People browse a grocery store following the announcement of tariffs on Canadian and Mexican goods by U.S. President Donald Trump, in Toronto, Ontario, Canada March 4, 2025. REUTERS/Arlyn McAdorey/File Photo
A customer looks for produce at a grocery store in Ottawa, on Wednesday, April 2, 2025. THE CANADIAN PRESS/Justin Tang
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Overview

  • Canada's annual inflation rate fell to 2.3% in March, down from 2.6% in February, according to Statistics Canada.
  • Core inflation measures, closely monitored by the Bank of Canada, remained elevated, with CPI-median at 2.9% and CPI-trim at 2.8%.
  • Gasoline prices decreased by 1.6% year-over-year, driven by declining crude oil prices and concerns over global economic slowdown.
  • Food prices rose by 3.2%, while alcoholic beverages saw a 2.4% increase, partially offset by a 4.7% decline in travel tour prices and a 12.0% drop in air transportation costs.
  • The Bank of Canada is set to announce its monetary policy decision on Wednesday, facing challenges from mixed inflation signals and tariff-related economic uncertainties.