Annual inflation drops sharply below 2% target in September
Annual inflation was 1.6 per cent in the month, down from two per cent in August, thanks largely to continually lower gasoline prices, the agency said.
Inflation in Canada dropped sharply in September, falling below the Bank of Canada’s target of two per cent, according to a report from Statistics Canada on Tuesday.
Annual inflation for the month stood at 1.6 per cent, down from two per cent in August, primarily due to continued declines in gasoline prices, the agency said.
StatCan noted that inflation is now at its lowest point since February 2021.
Grocery prices remained stable, rising 2.4 per cent year-over-year. Although seafood and nuts saw annual price declines, other food items became more expensive. Fresh or frozen beef prices increased by 9.2 per cent, edible fats and oils rose by 7.8 per cent, and egg prices were 5.0 per cent higher than a year ago.
Airfare also saw a decline, falling 4.4 per cent annually and dropping 14.3 per cent from August, reflecting typical seasonal trends for the fall, StatCan added.
While housing costs from rent and mortgage payments continue to contribute to inflation, there was a slight slowdown in September. Rent rose 8.2 per cent year-over-year, down from the 8.9 per cent increase reported in August.
Despite this recent easing, StatCan emphasized that living costs remain high. Over the past three years, the consumer price index has risen by 12.7 per cent, with rent up by 21 per cent and grocery prices increasing 20.7 per cent in that period.
The Bank of Canada, which has been cutting its benchmark interest rate in recent months, is now focusing on the risk that inflation could drop too far below its two per cent target.
