Canada's annual inflation rate decreased slightly to 1.8% in December 2024, down from 1.9% in November and below market expectations of a 1.9% reading.
Canada inflation unexpectedly falls
This marks the lowest rate of price growth since September. Inflation has now remained at or below the Bank of Canada's 2% midpoint target for five consecutive months, fueling expectations of additional rate cuts in the year ahead.
Inflation eased notably for food, dropping to 0.6% from 2.8% in November, partly due to a decrease in food purchased from restaurants (-1.6%) attributed to tax breaks.
Shelter inflation also slows
Shelter inflation also slowed slightly to 4.5% from 4.6%, with rent and mortgage interest costs experiencing smaller increases. However, transportation costs rose faster, accelerating to 2.3% from 1.1%, driven by a significant jump in gasoline prices (3.5% vs. -0.5%). On a monthly basis, Canadian consumer prices declined by 0.4%.
