Canada's annual inflation rate slowed to 5.9% in January, despite food prices rising at an even faster pace last month.
In its consumer price index report released Tuesday, Statistics Canada said the slowdown in inflation from the 6.3% we had in December reflects a year-over-year effect taken as a baseline.
A base year effect refers to the impact of price movements from a year ago on the calculation of the year-over-year inflation rate.
Given that much of the acceleration in price growth occurred in the first half of 2022, when the threat of Russia invading Ukraine became a reality, the federal agency said the annual inflation rate will continue to decline in the coming months.
The last time Canada's annual inflation rate was below six percent was in February 2022, when it was 5.7 percent.
The headline inflation rate was lower in January than many commercial banks anticipated in their forecasts, indicating good news for the Bank of Canada.