OTTAWA, April 20 (Xinhua) -- Canadian consumer prices rose 6.7 percent in March year over year, the largest increase since January 1991, Statistics Canada announced Wednesday.
The agency said inflationary pressure in Canada remained widespread in March, as prices rose across all eight major components. Prices increased against the backdrop of sustained price pressure in the country's housing markets, substantial supply constraints and geopolitical conflict, which has affected energy, commodity, and agriculture markets.
Excluding gasoline, the Consumer Price Index (CPI) rose 5.5 percent in March year over year, the fastest pace since the introduction of the all-items excluding gasoline special aggregate in 1999, following a 4.7 percent rise in February.
On a monthly basis, the CPI rose 1.4 percent in March, following a 1 percent gain in February. This was the largest increase since January 1991, when the goods and services tax was introduced. On a seasonally adjusted monthly basis, the CPI rose 0.9 percent in March, matching the largest increase on record.
In March, gasoline prices rose 11.8 percent month over month, following a 6.9 percent increase in February. Higher crude oil prices pushed prices at the pump higher. Year over year, consumers paid 39.8 percent more for gasoline in March.
Shoppers paid 8.7 percent more for food purchased from stores in March on a year-over-year basis, up from a 7.4 percent increase in February. This is the largest yearly increase since March 2009. Increases in input prices and transportation costs continued to put upward pressure on grocery prices.
Prices for dairy products and eggs rose 8.5 percent year over year in March, following a 6.9 percent increase in February. This is the largest yearly increase since February 1983. Prices for pasta products were up 17.8 percent on a year-over-year basis, the largest increase since January 2009. Breakfast cereal and other cereal products (excluding baby food) increased 12.3 percent year over year, the fastest pace of price growth since June 1990.
The increases occurred as prices for wheat futures reached a 14-year high in the context of the conflict between Russia and Ukraine, two major wheat exporters. Prices for fertilizer, a key input in wheat production, were elevated prior to the conflict in Eastern Europe, due, in part, to higher energy prices, according to data released by Statistics Canada.
CIBC economist Andrew Grantham said inflation surged beyond everyone's expectations in March.
"Inflation continues to run well ahead of expectations from earlier in the year, linked not just to commodity price spikes but also to stronger underlying price pressures as well," Grantham said, forecasting that the upside surprise is likely to bring another non-standard 50 bp hike from the Bank of Canada at its next meeting.
While March should represent the peak in inflation due to the slight pullback in energy prices from their highest point, a more meaningful deceleration in inflationary pressure will likely wait until the second half of this year and into 2023, he said.
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