Canada Inflation January 2019


Canada: Inflation falls to 15-month low in January

February 27, 2019

Consumer prices fell a seasonally-adjusted 0.1% from a month earlier in January, contrasting December’s 0.2% increase. According to Statistics Canada, the fall was mostly driven by a decrease in transportation, which was partially offset by an increase in shelter and alcoholic beverages, tobacco products and recreational cannabis prices in January.

Inflation plunged to 1.4% in January, from 2.0% in December, marking a 15-month low. The reading was bang on with market analysts’ expectations and landed below the midpoint of the Central Bank’s target range of 1.0% to 3.0%. Meanwhile, annual average inflation ticked down to 2.2% in January from 2.3% in December. Core inflation, which excludes volatile items including fuels and fresh produce, inched down to 1.5% from 1.7% in December.

Commenting on January’s inflation report, James Marple, senior economist at TD Economics, noted:

“The Bank of Canada is maintaining a bias to further tightening, but with limited inflation and slowing growth there is little urgency on this front. Indeed, much like their counterpart stateside, the benign inflation environment may lead policymakers to question whether further rate hikes are even necessary or whether the current policy setting is the fabled goldilocks “just right”.”

In its January monetary policy report, the Bank of Canada forecast inflation averaging 1.7% in 2019 and 2.0% in 2020. FocusEconomics Consensus Forecast analysts saw inflation averaging 1.9% in 2019, which is unchanged from last month’s forecast. For 2020, our panelists saw inflation averaging 2.0%.

Author:, Economist

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Canada Inflation Chart

Canada Inflation January 2019

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

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