Canada's Inflation Rate Eases to 2.3% in March Amid Falling Gasoline and Travel Costs

Canada’s annual inflation rate slowed to 2.3% in March, down from 2.6% in February, according to Statistics Canada. The decline was largely driven by falling gasoline prices and lower travel costs, including a drop in airfares.

The agency also noted a decline in cross-border travel, attributing it to Canadian concerns over tariff threats from U.S. President Donald Trump. This reduced travel demand has contributed to lower airfare costs.

The latest inflation data comes just ahead of the Bank of Canada’s interest rate decision, scheduled for Wednesday. Financial markets are currently predicting a 60% chance that the central bank will pause its rate-cutting cycle after implementing seven consecutive rate cuts.

Despite the overall easing in inflation, food prices continued to climb, rising by 3.2% year-over-year. Prices for alcoholic beverages also increased, up 2.4% on an annual basis.