Canada's annual inflation rate accelerated to 2.8% in April, up from 2.3% in March, driven primarily by higher gasoline prices, Statistics Canada reported Tuesday.
Gasoline Prices Drive Increase
Gasoline prices rose 6.1% month-over-month in April, contributing significantly to the overall CPI increase. Excluding gasoline, the inflation rate would have been 2.4%, the agency noted.
The transportation index rose 3.5% annually, with higher prices for gasoline and fuel oil. Meanwhile, food prices continued to climb, with grocery prices up 3.1% compared to last year.
Core Inflation Measures
The Bank of Canada's core measures of inflation, which strip out volatile items like food and energy, remained elevated. CPI-trim and CPI-median averaged 2.9%, unchanged from March.
Shelter costs also remained a key driver, with mortgage interest cost index up 12.1% year-over-year and rent prices rising 7.4%.
Regional Breakdown
Inflation accelerated in all provinces except Alberta, where it held steady. Ontario saw the largest jump, rising to 2.9% from 2.2% in March. British Columbia's rate climbed to 3.0%.
The data comes as the Bank of Canada considers its next interest rate decision, with markets pricing in a potential rate cut in the coming months. However, the uptick in inflation may delay easing.
Economists had expected the April CPI to come in at 2.7%, according to Bloomberg. The stronger-than-expected reading could keep the central bank cautious.
