Food less as inflation slows

Photo: The Canadian Press

The country's annual inflation rate slowed to an unexpectedly weak 1.6 per cent last month as the continued decline in food prices played a big role in offsetting the higher cost of gasoline, Statistics Canada said Friday.

The agency's latest reading shows the pace of inflation decelerated from February's year-over-year reading of two per cent, which was right on the Bank of Canada's ideal target. In B.C., the inflation rate was 2.0 per cent, down from 2.3 per cent a month earlier.

A consensus of economists had predicted 1.8 per cent inflation for March, according to Thomson Reuters.

Statistics Canada's consumer price index shows some of the biggest downward forces on inflation were lower prices for clothing and footwear, which declined 0.9 per cent, and food, which fell 1.9 per cent.

A closer look at the data shows that, compared to a year earlier, the cost of fresh fruit dropped 12.4 per cent while fresh vegetable prices fell 10.2 per cent. The report says year-over-year food prices fell 1.9 per cent in March — a sixth-straight monthly decline.

Meanwhile, gas prices increased 15.2 per cent last month.