Canada Inflation January 2016


Canada: Inflation hits midpoint of Central Bank target range in January

February 19, 2016

In January, seasonally-adjusted consumer prices recorded a 0.2% increase over the previous month, which was broadly in line with December’s 0.1% increase. According to Statistics Canada, six of the eight components of the index increased, with only transportation as well as clothing and footwear decreasing.

Inflation was 2.0% in January, up from 1.6% in December. January’s result was above the 1.7% expected by the markets and marked the highest rate in over a year. January’s figure was right in the middle of the Bank of Canada’s target range of 2.0% plus/minus 1.0 percentage point. Annual average inflation in January was 1.2%, up from December’s 1.1%. Core inflation, which excludes volatile items such as gasoline and fresh food, increased slightly from 1.9% in December to 2.0% in January.

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 Chart

Canada Inflation January 2016 0

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

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