Canada experienced a decrease in its annual inflation rate to 1.8% in February, as reported by Statistics Canada on Monday. This decline was attributed to the conclusion of last year’s “tax holiday,” impacting the year-over-year figures. In February, inflation decelerated compared to the previous year, with prices being driven upwards when the GST break ended in the middle of the month, a phenomenon known as a “base effect” among economists.
The decrease in gas prices was less significant compared to the same period last year, primarily influenced by the rising costs of crude oil leading up to the Middle East conflict. The full impact of the war, which commenced at the end of February, will not be fully evident until the next month’s inflation report.