The annual inflation rate in Canada slowed to 1.8 percent, largely due to base year effects that lowered the year on year comparison, according to the latest economic data.
Statistics released by Statistics Canada showed that consumer price growth moderated compared with previous months, reflecting changes in the price index compared with higher levels recorded during the same period last year.
Economists say the decline was mainly influenced by the base year effect, a statistical phenomenon where current inflation appears lower because prices rose sharply during the comparable period a year earlier.
The latest data suggests inflation in Canada is moving closer to the target range monitored by the Bank of Canada, which aims to keep inflation around 2 percent over the medium term.
Lower price increases in some key categories such as energy and goods contributed to the slowdown, although prices for services and housing remain relatively elevated.
Analysts say the easing inflation rate could influence future monetary policy decisions by the Bank of Canada, which has been balancing the need to control inflation with concerns about economic growth.
While the decline to 1.8 percent indicates some progress in stabilising prices, economists caution that underlying inflation pressures in sectors like housing and services could keep price growth from falling too quickly.
The latest figures will be closely watched by policymakers and financial markets as they assess the outlook for interest rates and economic activity in Canada.
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