Price trends are shaken up these days by major economic changes, which should result in an increase in inflation in Canada next week.
Economists interviewed by Reuters expect annual inflation for the month of March to be 2.6 %, which would correspond to the rate of February.
According to Randall Bartlettdeputy chief economist at the Desjardins movement, the decline in the Canadian dollar, which increases import costs, the persistent increase in food prices as well as the first effects of customs duties should have an impact on the consumer price index (IPC) in March.
We always anticipate high basic inflation and high inflation of food prices
he said in an interview.
Reduction prices of raw materials
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Oil was negotiated at $ 70 in a barrel in March, compared to around $ 80 in the same month last year.
Photo: Elvis Nouemsi Njiké
If trade tensions have contributed to increasing inflationary pressure in some respects, including the drop in the huard, they also attenuated pressure in other aspects, for example the decrease in economic confidence and the drop in prices for raw materials.
Oil, for example, has been negotiated at less than $ 70 a barrel in March, compared to around $ 80 a barrel for the same month last year.
Overall, customs duties should only have a modest impact in March, because Canada has not yet implemented most of the retaliatory measures it has announced.
We have joined the impact of customs duties, but we think it is quite modest.
The federal government adopted reprisals worth approximately $ 30 billion on American products at the beginning of March, when the United States imposed customs duties of 25 %, then partially canceled them.
Canada has also imposed $ 30 billion in counter-triggers in mid-March in response to American customs duties on metals, but it did not have to implement additional counter-trials of $ 125 billion because the United States has suspended certain tariff threats.
Review inflation forecasts downwards?
While the decrease in counter-tariffs contributes to maintaining inflation at a low level, the fact that the United States refrains from applying customs duties of 25 % on Canadian products could stimulate expenses while other pressures continue to practice prices, according to Bartlett.
The postponement of retaliatory measures ensures that it expects to revise its forecasts in terms of inflation for the year.
Inflation will decrease, but it will remain higher than what the Bank of Canada could accept.
Canada Bank will probably maintain its interest rates
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Canada Bank
Photo : Radio-Canada / Benoit Roussel
The Bank of Canada is expected to make its next interest in interest rate on Wednesday.
The central bank has a decision delicate
To take into account all the factors, including the imminent federal elections, according to the chief economist of the Bank of Montreal, Douglas Porter.
The inflation rate will not be very high
advanced Mr. Porter, who expects a rate of 2.7 %. If this is the case, it would be the eighth drop in affiliate. He stressed that the Bank of Canada can be reassured knowing that the April rate will fall almost certainly
.
The abolition of carbon pricing from April, the general decrease in crude oil prices and the increase in Canadian dollar are all factors that will promote inflationary trends, he said.
The Bank of Canada will also have to take into account inflation expectations. His recent survey has shown that short -term consumer expectations have increased in the last quarter for the first time since 2022.
These trends mean that the Bank of Canada will probably maintain its interest rates, believes Mr. Bartlett.
The expectations were significantly higher than that many analysts expected, so that the Banque du Canada focused on this point during its last deliberations.
The central bank will also want keep a room for maneuver
In case the economic situation is notably deteriorating, he said.
Housing market trends, including the drop in rents as well as the slowdown in sales and prices of houses, will also help to alleviate inflationary pressure. Interest rate drops that have already occurred will attenuate the pressure exerted by the cost of mortgage loans.
