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Canada Inflation August 2019

Canada: Inflation ticks down in August

Consumer prices were flat on a seasonally-adjusted basis from a month earlier in August, following July’s 0.4% increase. According to Statistics Canada, higher food and shelter prices were offset by lower prices for alcoholic beverages, tobacco products and recreational cannabis.

Inflation inched down from July’s 2.0%, to 1.9% in August and missed analysts’ expectations of a 2.0% outturn. Consequently, inflation fell below the midpoint of the Central Bank’s target range of 1.0% to 3.0%. Meanwhile, annual average inflation was stable at July’s 2.0% in August.

Going forward, inflation should remain relatively stable, supported by solid wage growth and the recently introduced carbon tax. That being said, developments in commodity prices remain a key risk to the inflation outlook.

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