Canadian inflation: Economist forecasts drop in living costs ahead

Canadian inflation is cooling as a result of heightened interest rate hikes from the Bank of Canada, and one economist foresees price increases to slow even further in the months ahead.

In February, the consumer price index climbed 5.2 per cent higher compared to the year prior, but this marked the fastest deceleration in Canadian inflation since April 2020. This slowdown is an encouraging piece of data, according to a former Bank of Canada economist, who views the deceleration as a positive sign that the high cost of living could continue to ease.

“We’ll see sharp price deceleration in the coming months,” Charles St-Arnaud, chief economist with Alberta Central, said in an interview on Tuesday.

For now, however, Canadians are still grappling with elevated prices, particularly in food costs. Prices rose 10.6 per cent in grocery stores in February, marking the tenth consecutive month of a double-digit rise, Statistics Canada revealed.