(Updates throughout)
OTTAWA, April 21 (Reuters) - Canadian retail sales
dipped by 0.2% in February from January, and are expected to
drop another 1.4% in March, according to data from Statistics
Canada on Friday, indicating high interest rates may be starting
to dent consumer spending.
February's decline, smaller than analysts' forecast of a
0.6% fall, was led by lower sales at gasoline stations and fuel
vendors as well as and general merchandise retailers, Statscan
said. By volume, retail sales decreased 0.7%.
The estimated 1.4% retails sales decline in March, which
could change when data is released next month, would be the
biggest drop in 8 months.
"The flash estimate suggests that consumers might be
starting to feel the pinch from higher interest rates,"
Desjardins economist Tiago Figueiredo said in a note.
"This reinforces the Bank of Canada's (BoC) view that
the Canadian economy is set to decelerate and shouldn’t require
any further rate increases," Figueiredo said.
The BoC raised rates at a record pace over the past year to
cool inflation, and then became the first major central bank to
pause monetary tightening. It has left its key policy rate at a
15-year high of 4.50% at its last two policy-setting meetings to
let the effects of the hikes sink in.
In February, sales decreased in four of nine subsectors,
representing 48% of retail trade.
(Reporting by Ismail Shakil and Dale Smith in Ottawa
Editing by Frances Kerry)
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