Inflation jumps to 2.4% in March driven by Iran war oil shock: StatsCan
· Toronto Sun
The annual inflation rate jumped to 2.4% in March as the Iran war caused fuel costs to rise, according to Statistics Canada.
That’s more than half a percentage point up from the inflation rate of 1.8% in February, although economists widely expected March’s figures to be higher.
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Fuel prices skyrocket
The decision to close the Strait of Hormuz by Iran in response to attacks from Israel and the United States, as well as the uncertainty over ceasefire talks, have prompted global fuel prices to rise in the last few weeks.
According to Statistics Canada data released Monday, March’s 21.2% monthly increase in gasoline price was the largest on record.
The inflation increase would’ve been higher, but the federal government’s move to kill the consumer carbon price a year prior will take some steam out of the yearly inflation comparison, StatsCan noted.
Inflation would’ve been 2.2% in March if gasoline weren’t part of the equation, marking a second consecutive monthly decline, the agency noted.
Food inflation decreases
Inflation for food decreased to 4% from 5.4% in February. This comes as lingering misrepresentation of the Mark Carney government’s two-month “tax holiday” from last year fell out of annual comparisons, StatsCan stated. That drove down inflation at restaurants and on some grocery items in March.
In March, fresh vegetable prices jumped 7.8% year-over-year, which the agency said was due to recent rough growing conditions for produce such as peppers, cucumbers and celery.
The next interest rate decision will come on April 29, as the Bank of Canada will be paying close attention to March inflation figures. The central bank said it will look through the initial inflation spike tied to the Iran war, but will act accordingly to ensure high gas prices don’t result in longer-term inflation.
— With files from The Canadian Press