The Toronto skyline in Canada

Canada Inflation January 2024

Canada: Inflation declines to lowest level since June 2023 in January

Inflation dropped to 2.9% in January, following December’s 3.4% and well below market expectations. January’s reading marked the lowest inflation rate since June 2023 and meant that inflation moved back within the Central Bank’s 1.0%–3.0% target range for the first time since June 2023. The result was largely driven by lower price pressures for food, transport and clothing more than offsetting brisker housing price inflation.

Annual average inflation fell to 3.6% in January (December: 3.9%). Meanwhile, core inflation edged down to 2.4% in January, from the previous month’s 2.6%.

Finally, consumer prices were flat in January over the previous month, following December’s 0.31% drop.

On the monetary policy implications, Goldman Sachs analysts said:

“Inflation surprised to the downside in January and the details of the report were also weak, so we view [the] print as a signal that inflationary pressures are cooling, consistent with our expectation that inflation will fall back to +2.1% by end-2024. Today’s data increase our confidence that the BoC cuts for the first time at an upcoming meeting, but we believe that the BoC will want to see more evidence of sustained easing in underlying inflation prior to any pivot (especially given slower progress in forward-looking inflation indicators like inflation expectations and wage growth).”

Free sample report

Access essential information in the shortest time possible. FocusEconomics provide hundreds of consensus forecast reports from the most reputable economic research authorities in the world.
Close Left Media Arrows Left Media Circles Right Media Arrows Right Media Circles Arrow Quote Wave Address Email Telephone Man in front of screen with line chart Document with bar chart and magnifying glass Application window with bar chart Target with arrow Line Chart Stopwatch Globe with arrows Document with bar chart in front of screen Bar chart with magnifying glass and dollar sign Lightbulb Document with bookmark Laptop with download icon Calendar Icon Nav Menu Arrow Arrow Right Long Icon Arrow Right Icon Chevron Right Icon Chevron Left Icon Briefcase Icon Linkedin In Icon Full Linkedin Icon Filter Facebook Linkedin Twitter Pinterest