Canada Inflation June 2016


Inflation stable in June

Seasonally-adjusted consumer prices recorded a 0.2% increase in June over the previous month, matching May’s reading. According to Statistics Canada, prices in five of the eight components of the index increased over the previous month, while prices for food and for alcoholic beverages and tobacco products decreased. Prices for recreation, education and reading registered no change.

Inflation was 1.5% in June, which was level with May’s reading. June’s result was marginally above market expectations of 1.4% and remains within the Bank of Canada’s target range of 2.0% plus/minus 1.0 percentage point. Annual average inflation in June was also level with May’s tally of 1.4%—the highest reading since July 2015. Core inflation, which excludes volatile items such as gasoline and fresh food, also remained unchanged at May’s 2.1% in June.

The Bank of Canada expects headline inflation to end 2016 at 1.8%, according to its July Monetary Policy Report. For 2017, the Bank expects inflation to close the year at 2.1%. 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 increase and average 2.0% in 2017.

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Canada Inflation Chart

Canada Inflation June 2016

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

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