FX.co ★ Canada Inflation Falls to 7-Month Low

In April 2025, Canada's annual inflation rate declined to 1.7%, down from 2.3% in March, surpassing market predictions of 1.6%. This marks the most modest increase in consumer prices over the past seven months. The deceleration was largely influenced by a decrease in energy prices, which dropped to -1.7% from -0.3% in March. This reduction was amplified by the removal of the consumer carbon tax, alongside increased oil production by OPEC, both contributing to the decline in energy costs. As a result, there was a notable decrease in gasoline prices, down 18.1% from 1.6%, and in natural gas prices, which fell by 14.1% compared to a previous rise of 6.4%. Transportation costs correspondingly declined to -1.9% from 1.2%, and inflation within the shelter sector eased to 3.4% from 3.9%. Conversely, certain areas experienced cost inflation, including travel tours, which rose by 6.7%, groceries, increasing to 3.8% from 3.2%, household operations, furnishings, and equipment, which edged up to 1.1% from 0.8%, and recreation, education, and reading, which climbed to 1.4% from 0.9%. Notably, the trimmed-mean core Consumer Price Index (CPI), a key measure monitored by the Bank of Canada for assessing underlying inflation, unexpectedly surged to 3.1%, reaching its highest point in two years.