Canada Inflation


Canada: Inflation inches up in June, reaches 28-month high

July 18, 2014

In June, consumer prices increased a seasonally-adjusted 0.3% over the previous month, which came in slightly above the 0.2% rise recorded in May. According to Statistics Canada, the overall price increase was broad-based as all categories that constitute the index recorded a rise in prices. The largest increase was tallied in the alcoholic beverages and tobacco category.

Annual headline inflation inched up from 2.3% in May to 2.4% in June, which slightly exceeded market expectations of a 2.3% price increase and marked the highest inflation rate since February 2012. Inflation is still well anchored within the Central Bank’s tolerance margin of plus/minus 1.0 percentage points around its target of 2.0%. The overall upward trend continued as annual average inflation rose from May’s 1.3% to 1.4% in June. Core annual inflation, which excludes volatile items such as gasoline and fresh food, rose from 1.3% in May to 1.4%.

According to its July Monetary Policy Report, the Bank of Canada expects headline inflation to average 1.6% in 2014 and 1.7% in 2015. FocusEconomics Consensus Forecast panelists expect inflation to average 1.6% in 2014, which is unchanged from the previous month’s forecast. The panel expects inflation to average 1.9% in 2015.

Author: Teresa Kersting, Economist

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Canada Inflation Chart

Canada Inflation June 2014

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

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