Canada's annual inflation rate declined in March despite the elimination of the federal government's temporary tax breaks, and consumers paid less at gas stations and on tourist travel and airfares.

The country's consumer price index rose 2.3% year-on-year, Statistics Canada reported Tuesday. The market was expecting a 2.7% increase, according to economists at TD Securities.

After being at or below the central bank's 2% target for six consecutive months, inflation in February rebounded to 2.6%.

On a month-on-month basis, prices rose by 0.3%, lower than the consensus forecast of a 0.7% increase. In seasonally adjusted terms, the CPI remained unchanged from the previous month.

The average of the Bank of Canada's preferred trimmed mean and weighted median measures of core inflation was virtually unchanged, declining only slightly to 2.85% y-o-y from an eight-month high of 2.9% in February.

Robb M. Stewart, TradingView