Canada Inflation March 2020


Canada: Inflation eases to the lowest level since May 2015 in March

April 22, 2020

Consumer prices decreased 0.9% from a month earlier on a seasonally-adjusted basis in March, contrasting the 0.1% uptick in February. According to Statistics Canada, plunging transportation prices and lower shelter costs drove the largest month-on-month decline in the series’ 28-year history.

Inflation eased to 0.9% in March on a sharp fall in gasoline prices (February: 2.2%). The reading was lower than market analysts’ expectations of 1.2% and fell below the Central Bank’s 1.0%–3.0% target range. Meanwhile, annual average inflation ticked down to 2.0% in March from 2.1% the month prior.

Commenting on March’s print, James Marple, senior economist at TD Economics, noted:

“Inflation is the least of anyone's concerns at the moment, but it is notable that the mandated closure of large swathes of the economy in late March is having a profound effect on price growth. This is yet another data series showing unprecedented movements and which will continue to do so at least through the month of April.”

FocusEconomics Consensus Forecast analysts, meanwhile, see inflation averaging 1.1% in 2020, which is down 0.2 percentage points from the previous month’s forecast. For 2021, our panelists see inflation averaging 1.8%.

Author:, Economist

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Canada Inflation Chart

Canada Inflation March 20 20 1

Note: Year-on-year and month-on-month variation of seasonally-adjusted consumer price index in %.
Source: Statistics Canada (SC).

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