Canada Inflation December 2015

Canada

Canada: Inflation increases to 13-month high in December

January 22, 2016

In December, seasonally-adjusted consumer prices recorded a 0.1% increase, which was broadly in line with November’s 0.2% increase. According to Statistics Canada, four of the eight components of the index increased, with the food category registering the largest change.

Inflation was 1.6% in December, up from 1.4% in November. December’s result was just below the 1.7% expected by the markets but marked the highest rate in over a year. December marked the second consecutive month in which headline inflation was within the Bank of Canada’s target range of 2.0% plus/minus 1.0 percentage point. Annual average inflation in December was steady at November’s 1.1%. Annual core inflation, which excludes volatile items such as gasoline and fresh food, decreased slightly from 2.0% in November to 1.9% in December.

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 December 2015

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


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