Canada March CPI Seen Rising to 2.5% on Oil Prices

OTTAWA Statistics Canada is scheduled to release its March consumer price index data on Monday morning, with economists anticipating a rise in the headline inflation rate to 2.5 percent from 1.8 percent in February, driven by surging oil prices amid the ongoing conflict involving Iran.

The increase stems from a sharp escalation in global oil costs following Iran's decision to close the Strait of Hormuz, a critical chokepoint for about one-fifth of the world's fuel shipments. The shutdown came in response to recent attacks by the United States and Israel, sending energy prices higher and affecting gasoline costs across Canada. A poll of economists conducted by Reuters and compiled by LSEG Data Analytics points to this oil shock as the primary factor behind the projected uptick in inflation.

RBC senior economist Claire Fan noted that the March figure could have climbed even further without the lingering effects of the federal government's decision last year to eliminate the consumer carbon price. "The removal of the consumer carbon price is still taking some steam out of the annual price comparisons," Fan said. She added that inflation is likely to exceed 3 percent in April, as...