Canada’s Inflation Rate Slowed to 2.8% in February, Beating Expectations for 2nd Month in a Row
Canada’s inflation rate surprisingly took a dip to slow down and reach 2.8% in February, beating the expectations of the analysts who expected to see a climb from the 2nd month (February) of the current year. Unexpectedly, the annual inflation rate of Canada significantly slowed and cooled down. It reached 2.8 per cent. As per the statistics revealed by Canada in last Tuesday, the low cost of cellular service, groceries and internet access services are responsible for the slower inflation growth. The agency told the media that rent, groceries, cellular service, and mortgage interest costs are expected to become primary drivers of Canada’s inflation rate. Surprisingly, gas prices in Canada ticked up to reach 0.8 per cent in February. After that, it declined four per cent in January.
A vast majority of Economists there expected an inflation rate to rise at least 3.1 per cent. This is a very good sign.
People of Canada who purchased their new plans for cell phones in February paid 26.5 per cent lower than they purchased at the same time last year. The reason is probably the new plan prices which are lower than last year. Moreover, it included increased data allowances.
The Bank of Canada liked the core inflation measures that did not count volatile sectors like food and beverages, energy, etc. This is another reason for the below expectations of the inflation rate that the economists expected in the last month. CIBC economist, Katherine Judge wrote it is a very good sign and an encouraging symbol for the central bank.
Judge added that February, the second month in a queue showed a lower inflation rate than expected. According to him, higher interest rates set by the Bank of Canada are playing a very good role in taming inflation in Canada. This is a very positive sign for the country’s economic growth.
