Canada Inflation March 2017

Canada

Canada: Inflation eases in March

April 21, 2017

Seasonally-adjusted consumer prices declined 0.2% in March from a month earlier, which was a slight moderation from February’s 0.3% slide that had marked the steepest monthly drop in a year. According to Statistics Canada, prices fell in three of the eight major subcomponents of the index. The transportation subcomponent recorded the largest decline, while food prices posted a slight increase from a month earlier.

Inflation dipped to 1.6% in March from 2.0% in February and marked a second consecutive month of easing. March’s result landed below the midpoint of the Bank of Canada’s target range of 2.0% plus/minus 1.0 percentage point, returning to territory it occupied for much of 2016. Meanwhile, annual average inflation was stable in March from a month earlier at 1.5%. Core inflation, which excludes volatile items including gasoline and fresh food, fell to 1.3% in March from 1.7% in February.

In its April monetary policy report, the Bank of Canada revised its inflation expectations upward to 1.9% in 2017 and 2.0% in 2018. FocusEconomics Consensus Forecast panelists expect inflation to average 2.0% in 2017, which is unchanged from last month’s forecast. Our panelists also expect inflation to average 2.0% in 2018.


Author:, Economist

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