Canada’s inflation rate declined to an annualized rate of 1.6% in September, down from 2% in August and the lowest level since February 2021.
The inflation rate is now below the Bank of Canada’s 2% annualized target, giving the central bank leeway to further lower interest rates in coming months.
Statistics Canada attributed the sharp decline in inflation during September to lower gasoline prices, which fell 10.7% year-over-year in the month.
Core inflation, which strips out volatile food and energy prices, rose 2.2% in September, matching the increase seen in August of this year.
On a monthly basis, inflation in Canada declined 0.4% in September from August. On a seasonally adjusted monthly basis, inflation was unchanged.
Rent prices continue to be one of the biggest contributors to inflation across Canada. While rent increased at a slower pace in September, it still rose 8.2% from a year earlier.
Food prices at grocery stores also continue to trend higher. In September, food purchased from stores rose 2.4% from a year ago, the same growth rate as in August.
Grocery prices continue to rise at a faster pace than overall inflation, said Statistics Canada.
The federal statistics agency noted that consumer prices rose at a slower pace in September compared with August in all Canadian provinces.
