Canada's inflation rate falls to 2.9% amid declines in prices of gas, plane tickets

The annual inflation rate in Canada dropped to 2.9 per cent in January, according to Statistics Canada.

It was 3.4 per cent in December, 3.1 per cent in November and October, and 3.8 per cent in September.

The rate in BC was three per cent in January, down from 3.4 per cent in December.

StatCan said the biggest contributor to the decline across Canada was lower gas prices.

The agency explained that gas prices fell four per cent in January compared to 12 months earlier, pointing out that in January 2023 prices were affected by refinery closures in the US.

Grocery prices, however, continue to increase, but the speed of their growth has declined.

In January, they increased by 3.4 per cent year-over-year. In December, the yearly increase was 4.7 per cent.

Some food items, meanwhile, saw price declines, including bacon (-8.4 per cent) and prawns (-3.4 per cent).

Plane tickets also declined in price in January, by 14.3 per cent compared with January 2023.

Cell plans, too, fell 16.4 per cent year-over-year in January. In December, there was a 26.8 per cent decline.

But on a monthly basis – from December 2023 to January 2024 – cell costs increased 6.7 per cent, with StatCan explaining that promotional offers from November and December expired.

The Bank of Canada’s key interest rate remains at five per cent.

It has signalled in recent weeks that it will likely opt for a rate cut during its policy meeting on March 6.