Canada: Inflation continues to rise in June
July 19, 2013
In June, consumer prices increased a seasonally adjusted 0.3% over the previous month, which was above the 0.2% rise recorded in May. According to Statistics Canada, the monthly price increase mainly reflected higher prices for transportation, which in turn reflected higher prices for gasoline.
Annual headline inflation jumped from 0.7% in May to 1.2% in June, which was in line with market expectations. Inflation moved up from the lowest level in more than three years (0.4%) in April but remains below the Central Bank's target of 2.0% with a tolerance margin of plus/minus 1.0 percentage points. Meanwhile, annual average inflation remained stable at 1.0% in June. Core inflation, which excludes volatile items such as gasoline and fresh food, rose from 1.1% in May to 1.3% in June.
According to its July Monetary Policy Report, the Bank of Canada expects headline inflation to average 1.0% in 2013 and 1.7% in 2014 (previously forecasted: 1.2% and 1.8%, respectively). FocusEconomics Consensus Forecast panellists expect inflation to average 1.4% in 2013, which is unchanged from the previous month's forecast. The panel expects inflation to average 1.9% in 2014.