OTTAWA, April 18 (Reuters) - Canada's annual inflation rate slowed to 4.3% in March, matching expectations, as a fall in energy prices helped to keep the consumer price index in check despite a record rise in mortgage costs, Statistics Canada data showed on Tuesday.
Analysts polled by Reuters had expected annual inflation to drop to 4.3% from 5.2% in February. Month-over-month, the consumer price index was up 0.5%, again matching forecasts.
Prices of store-bought food also slowed to 9.7% in March, falling below 10% for the first time in eight months. Excluding food and energy, prices rose 4.5% compared with a rise of 4.8% in February.
The annual inflation rate, at the lowest level in 19 months, was also moving largely in line with the Bank of Canada's expectations that it would drop to around 3% by mid-2023.
Last week, the bank projected that inflation would cool to about 3% by mid-2023, but the decline toward the bank's 2% target would be more gradual than previously forecast due to stickier services prices.
Services prices rose 5.1% annually in March, while the price of goods increased by 3.6%, Statscan data showed.
The March inflation reading, which benefited from a comparison to last year's strong price increase, is still more than double the Bank of Canada's (BOC) 2% target.
The average of two of the BOC's core measures of underlying inflation, CPI-median and CPI-trim, came in at 4.5% compared with 4.9% in February.
Mortgage interest costs surged 26.4% in March, the largest yearly increase on record as Canadians continued to renew and initiate mortgages at higher interest rates, Statscan said.
