By Promit Mukherjee
OTTAWA, May 19 (Reuters) - Canada's annual inflation rate accelerated to 2.8% in April from 2.4% in March, driven largely by a surge in gasoline prices after the Iran war pushed global crude oil prices sharply higher, data showed on Tuesday.
This marks the first time in almost two years that the annual consumer price index reading soared to 2.8% underscoring how the war in Iran, that started on February 28, was quickly trickling down through the economy.
However, the inflation reading
came below expectations of analysts and economists as lower cost for travel and tours, some accommodation expenses and furniture costs dropped in April on a annual basis.
Analysts polled by Reuters had forecast the annual inflation rate at 3.1% and the monthly inflation rate at 0.7%. On a monthly basis inflation was at 0.7% in April, Statistics Canada said.
- The removal of the consumer carbon levy in April 2025, which resulted in monthly declines for gasoline and natural gas, has now fallen out of the 12-month movement, which also put upward pressure on the all-items in the CPI basket, StatsCan said.
- Gasoline cost, which rose by 28.6% in April and over 38% since the war began, drove transportation costs up by 7.6% in April, its highest since November 2022. Gasoline costs also went up on an annual basis as the impact of carbon levy ended.
- Other major April annual price increases were seen in food prices which rose by 3.5% in April, against a 4% increase in March; rents increased by 3.6% and passenger vehicle cost which was up 2.8%.
- The core measures of inflation, closely watched by the Bank of Canada to gauge underlying inflation trends, slowed down. CPI-median, the centermost component of the CPI basket, was at 2.1% in April from 2.3% in March. CPI-trim, which excludes the most extreme price changes, was down to 2% from 2.2% in the prior month.
- Prime Minister Mark Carney has offered a five-month relief on gasoline excise duty of 10 cents per liter.
(Reporting by Promit Mukherjee; Editing by Dale Smith)
