Canada Inflation June 2017

Canada

Canada: Inflation falls to a nearly two-year low in June

July 21, 2017

Seasonally-adjusted consumer prices were flat in June from a month earlier, contrasting May’s 0.2% fall and coming in just above the 0.1% decline expected by market analysts. According to Statistics Canada, the null print was the result of a sharp decline in transportation prices being largely offset by a jump in food, alcohol and tobacco prices. Meanwhile, the remaining five subcomponents of the index posted more moderate gains.

Inflation fell to 1.0% in June from 1.3% in May, landing just within the Bank of Canada’s target range of 2.0% plus/minus 1.0 percentage point. Meanwhile, annual average inflation was also stable at 1.5% for a fifth consecutive month in June. Core inflation, which excludes volatile items including gasoline and fresh food, was stable at 0.9% in June from a month earlier.

In its July monetary policy report, the Bank of Canada revised its inflation expectations downward to 1.6% in 2017 and to 1.8% in 2018. FocusEconomics Consensus Forecast panelists now expect inflation to average 1.8% in 2017, which is down 0.1 percentage points from last month’s forecast. For 2018, our panelists expect inflation to average 2.0%.


Author:, Economist

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Canada Inflation June 2017 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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