Canada’s inflation rate has fallen to 4.3% down from 5.2% measured in February, marking the lowest inflation rate since August 2021 according to Statistics Canada.
The inflation rate for consumers is expected to fall to 3% by the middle of 2023, eventually reaching the Bank of Canada’s 2% target by the end of 2024.
However, food prices continue to plague Canadians as prices went up 9.7% in the year leading up to March, slowing down slightly after a 10.6% rate seen in the previous month.
While inflation has fallen, many Canadians are seeing their mortgage interest costs rise by more than 26% in the year up to March in comparison to 23.9% seen in February. This was the largest yearly increase on record.
“Getting inflation down to three percent this summer will be a welcome relief for Canadians,” Governor Tiff Macklem said at a press conference last week. “But let me assure Canadians that we know our job is not done until we restore price stability.”
The Bank of Canada anticipates near-term inflation to decline with services price inflation and wage growth to moderate, according to its recent report. Economic growth is expected to be “subdued through the remainder of the year with the economy moving into excess supply in the second half.”
Last year, the Canada Mortgage and Housing Corporation said more than 22 million housing units are needed by 2030 to help most Canadians reach a price point they can afford.
In February, CIBC CEO Victor Dodig said Canada needed to take action to address housing supply to prevent a crisis shortage.
