Canada Inflation February 2016

Canada

Canada: Inflation eases in February

March 18, 2016

In February, seasonally-adjusted consumer prices recorded a 0.2% decrease over the previous month, which contrasted January’s 0.2% increase and marked the lowest figure in 10 months. According to Statistics Canada, the decrease was driven by a sharp decline in prices for transportation, followed by declines in prices for clothing and footwear.

Inflation was 1.4% in February, down from 2.0% in January. February’s result was slightly below the 1.5% expected by the markets. Inflation has eased from January’s reading, bringing the figure back down below the Bank of Canada’s target range of 2.0% plus/minus 1.0 percentage point. Annual average inflation in February mirrored January’s tally of 1.2%. Core inflation, which excludes volatile items such as gasoline and fresh food, eased slightly from 2.0% in January to 1.9% in February.

The Bank of Canada expects headline inflation to end 2016 at 1.4%, according to its January Monetary Policy Report. For 2017 the Bank expects inflation to close the year at 1.9%. FocusEconomics Consensus Forecast panelists expect inflation to average 1.9% in 2016, which is unchanged from the previous month’s forecast. The panel expects inflation to average 2.0% in 2017.


Author:, Economist

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Canada Inflation February 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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