With gasoline prices already dropping, Statistics Canada expects COVID-19 will impact inflation, already pointing downwards, as the pandemic impacts economic activity (Black Press Media File).

Stats Canada expects COVID-19 to impact inflation

Inflation trajectory already pointing downards because of COVID-19

Statistics Canada expects COVID-19 will impact inflation, already pointing downwards, as the pandemic impacts economic activity.

Citing declining demand for travel and oil among other factors, the agency expects a notable impact on consumer prices for various goods in the foreseeable future.

“Because of these factors, as well as supply chain disruptions for consumer goods, temporary closures of some stores and service providers, the recent lowering of interest rates and the recent slowing of economic activity, the price effects of the outbreak could be more deeply felt in subsequent months,” it reads in an analysis of inflation figures released Friday.

Accounting for seasonal factors, inflation across Canada rose by 0.1 per cent in February 2020, matching the increase in January 2020.

This marginal increase merely hints at the larger trajectory of the inflation rate. Year-to-year, the Canadian inflation rate February 2020 stood at 2.2 per cent. But in the previous month, the year-to-year inflation rate stood at 2.4 per cent. The rate of increase, in other words, was slowing down, even before the escalation of the COVID-19 beyond its initial epicentre in mainland China.

A closer look at gasoline prices — a gauge of economic activity around the world — underscores this point.

“On a year-over-year basis, prices for gasoline rose less in February (up seven per cent) than in January (up 11.2 per cent), reflecting lower crude oil prices amid lower global demand following the COVID-19 outbreak at the end of January,” it reads. “Likewise, consumers paid 1.3 per cent less for fuel oil and other fuels, following an 8.1 per cent increase in January.”

Prices for fresh fruit and vegetables, no small subject of interest for Canadians, have also been stagnating, rising 1.6 per cent in February 2020, the smallest year-over-year increase since June 2018.

RELATED: Canadian coronavirus morning update: Parliament to reconvene, Nova Scotia declares emergency

Notably, consumers paid less for oranges, reflecting lower farm prices for Florida oranges due to a decline in demand, and apples, amid a North American oversupply due to foreign trade restrictions on American apples. Year-over-year growth in the fresh vegetables index (up 3.3 per cent) slowed in February, reflecting reports of a plentiful supply of cucumbers, lettuce and peppers.

Consumers, in other words, were still paying more for key items in February than they did in January, but the increases have been slowing down.

Meanwhile, the prices for other goods have been dropping. “Year over year, prices for household operations, furnishings and equipment declined for the fifth consecutive month, largely due to lower prices for telephone services and household durable goods,” it reads.

Consumers also paid lower prices for multipurpose digital devices, which includes smartphones and tablets.

These figures, likely precursors of a significant economic decline because of COVID-19, have a notable geographic aspect.

British Columbia was the only province in Canada where inflation in February 2020 actually rose compared to the previous month. It slowed everywhere else, with Prince Edward Island and Alberta recording the biggest slow-downs in inflation with drops of 0.8 per cent and 0.5 per cent respectively.


Like us on Facebook and follow @wolfgang_depner

wolfgang.depner@peninsulanewsreview.com

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

No plan in place if Sooke homeless shelter forced to shut doors

Contract for Otter Road facility now month to month

New report finds ‘chronic’ shortage of daycare spaces across Greater Victoria

Sidney meets 52 per cent of demand, the best figure for six surveyed communities

Greater Victoria thrift shop quietly closes two locations indefinitely

Society of St. Vincent de Paul shut down Sooke and Central Saanich storefronts

Heavy rains cause wastewater overflow off Oak Bay, Saanich beaches

Affected beaches will be posted with public health advisory signs

Double the speed limit nets Saanich driver $368 fine, points, car impound in Colwood

Colwood council has identified Ocean Boulevard as a hot spot for speeding

B.C. reports 91 new cases as officials remain worried over ‘clusters of COVID-19

There have now been a total of 8,395 cases in B.C. since the pandemic began

POLL: Do you agree with the decision to call a provincial election for Oct. 24?

British Columbians will put their social distancing skills to the test when… Continue reading

Is it time to start thinking about greener ways to package cannabis?

Packaging suppliers are still figuring eco-friendly and affordable packaging options that fit the mandates of Cannabis Regulations

Join Black Press Media and Do Some Good

Pay it Forward program supports local businesses in their community giving

Mounties impound car of impaired driver celebrating birthday in North Vancouver

RCMP say the person was driving with their headlights off

‘Won’t be gathering for Thanksgiving:’ Trudeau says COVID-19 2nd wave underway

In all, COVID-19 has killed about 9,250 people in Canada

‘Show us the money’ for cannabis, local governments tell B.C.

Municipal tax, transit revenues falling as costs rise

Canada’s active COVID-19 cases top 10,000 as daily new cases triple over the past month

Dr. Tam repeated her warning to young people, who have made up the majority of recent cases

Liberal effort to reset policy agenda panned by rivals as too much talk, not action

Trudeau said it’s ‘all too likely’ families won’t be able to gather for Thanksgiving next month

Most Read