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Canada Inflation April 2024

Canada: Inflation drops to lowest level since March 2021 in April

Inflation came in at 2.7% in April, which was down from March’s 2.9% and in line with market expectations, but still towards the top of the Central Bank’s 1.0%–3.0% target range. April’s reading marked the lowest inflation rate since March 2021. The moderation was largely driven by slower growth in prices for food, housing, transportation and recreation and culture.

Annual average inflation ticked down to 3.2% in April (March: 3.3%).

Lastly, consumer prices increased 0.50% in April over the previous month, a smaller increase than the 0.63% increase recorded in March.

On monetary policy implications, TD Economics’ Leslie Preston said:

“April was another month of good news on Canadian inflation. The BoC’s preferred inflation gauges moved into the 1-3% target range for the first time in nearly three years. However, at 2.8% it is still close to the top of the BoC’s range, and we expect the bank will want to see a bit more confirmation before taking rates lower and lean towards a July cut.”

Goldman Sachs analysts were more dovish:

“Services inflation moderated meaningfully on the back of softer inflation for rent, travel services, and inter-city transportation. The April print confirms that inflation has meaningfully softened since the start of 2024 and increases our confidence that the BoC will initiate its easing cycle at the June meeting with a 25bp cut.”

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