Canada Inflation May 2016


Inflation slows in May

Seasonally-adjusted consumer prices recorded a 0.2% increase in May over the previous month, matching April’s reading. According to Statistics Canada, six of the eight components of the index increased over the previous month, while the food component declined and the health and personal care component was flat..

Inflation was 1.5% in May, down from 1.7% in April. May’s result was marginally below market expectations and remains within the Bank of Canada’s target range of 2.0% plus/minus 1.0 percentage point. Annual average inflation in May inched up from April’s tally of 1.3% to 1.4%, its highest reading since July 2015. Core inflation, which excludes volatile items such as gasoline and fresh food, inched down from 2.2% in April to 2.1% in May.

The Bank of Canada expects headline inflation to end 2016 at 1.5%, according to its April Monetary Policy Report. For 2017, the Bank expects inflation to close the year at 2.0%. FocusEconomics Consensus Forecast panelists expect inflation to average 1.6% in 2016, which is unchanged from the previous month’s forecast. The panel expects inflation to average 2.0% in 2017.

Author:, Economist

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Canada Inflation Chart

Canada Inflation May 2016 0

Note: Year-on-year and month-on-month variation of seasonally adjusted consumer price index in %.
Source: Statistics Canada (SC).

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