Canada’s Monthly Inflation Slows to 0.3% in April 2025
Canada’s Monthly Inflation Slows to 0.3% in April 2025
On April 15, 2025, Statistics Canada released the latest Consumer Price Index (CPI) data, revealing a month-over-month increase of 0.3% in March. This figure falls short of the anticipated 0.7% rise and is a significant deceleration from the 1.1% growth observed in February.
The unexpected slowdown in inflation is primarily attributed to declining gasoline prices, which dropped by 1.6% year-over-year. This decrease is linked to global concerns over oil demand and economic growth, particularly in light of recent tariff tensions.
Conversely, food and alcoholic beverage prices experienced notable increases, rising by 3.2% and 2.4% respectively. These hikes are partly due to the conclusion of temporary sales tax breaks that had previously tempered price growth in these categories.
Travel-related expenses also saw reductions, with travel tour prices decreasing by 4.7% and air transportation costs falling by 12.0%. These declines are attributed to reduced Canadian travel to the United States, influenced by ongoing trade tensions and economic uncertainties stemming from U.S. tariffs and Canada’s retaliatory measures.
Core inflation measures, closely monitored by the Bank of Canada (BoC), remained elevated. The CPI-median held steady at 2.9%, while the CPI-trim eased slightly to 2.8%.
This latest inflation data presents a complex scenario for the BoC, which is set to announce its monetary policy decision on Wednesday. Prior to the release, markets had priced in a 60% chance of a rate hold and a 40% chance of a cut. However, the unexpected slowdown in inflation has shifted expectations, with markets now evenly split on the likelihood of a rate cut.
