Canada’s annual inflation rate was reported to have doubled in March to 2.2% based on a report released by the Department of Statistics on Wednesday following being supported by rising prices in the higher energy sector and recovery from the Covid-19 pandemic.
Based on a Reuters survey, analysts forecast interest rates to hit a reading of 2.3% per annum in March, up from the February reading of 1.1%. Energy prices rose 19.1% year -on -year, while inflation excluding petrol and food rose 0.9% year -on -year.
Leading economist at the Royal Bank of Canada, Nathan Janzen, opined that the surge in the month was on target and driven by rising prices in the energy sector. At the same time, the BoC indicator also moved higher in March above the BoC inflation target of 2.2%.
According to the Department of Statistics, previously inflation was affected due to a large drop in prices at the beginning of the Covid-19 outbreak, thus affecting the rate of consumer inflation from year to year.
The Bank of Canada is expected to keep its key interest rate at 0.25% on Wednesday, and will update its growth and inflation forecasts.
The Canadian dollar traded 0.1% higher at 0.8005 against the US dollar following the release of this report.
