OTTAWA -- A reversal in the year-to-year fluctuation of gasoline prices took Canada's annual inflation rate down two-tenths of a point to one per cent last month, putting the rate in line with the Bank of Canada's expectations.

The March decline takes some of the volatility out of the measure following February's surprising 0.7 percentage point jump to 1.2 per cent, confirming widely-held views that Canada remains in a tepid inflation environment.

The key contributor to March's lower rate was a 0.3 per cent decline in the price of gasoline from a year ago, following February's 3.9 per cent increase. Statistics Canada said gasoline prices declined in seven of the 10 provinces.

Six of the eight major components that go into the inflation rate rose, but all by less than two per cent. As a result, core inflation, which excludes volatile items such as gasoline and fresh fruit, also remained in check, staying unchanged at 1.4 per cent.

In a new economic outlook released Wednesday, the Bank of Canada said it expected inflation to remain at about one per cent throughout the year and to stay below its preferred two per cent target until sometime in 2015.

On individual items, there were some more pronounced movements, both up and down, including a 7.2 per cent increase for fresh vegetables and 8.7 per cent jump for fresh fruit. But overall, food prices rose only 1.8 per cent over last year, slightly less than February's rise.

As well, tuition fees were up 3.7 per cent on an annual basis, and property taxes rose 2.8 per cent.

Significant downward movements included a four per cent dip on mortgage interest costs, a 9.6 per cent fall for video equipment, a 3.7 per cent slide in air transportation and a 3.6 per cent decline in non-alcoholic beverages. Travel tours were also less expensive, down 4.8 per cent.

On a monthly basis, prices increased by 0.2 per cent from February to March as gas rose slightly, while clothing and footwear increased by 4.3 per cent. But food prices were down overall by 0.4 per cent.

Regionally, the inflation rate was highest in Manitoba at 2.3 per cent and lowest in British Columbia, at 0.5 per cent.