Canada Inflation July 2019

Canada

Canada: Inflation is unchanged in July at Central Bank's target midpoint

August 21, 2019

Consumer prices increased a seasonally-adjusted 0.4% from a month earlier in July, contrasting June’s 0.1% fall. According to Statistics Canada, the increase was mostly driven by higher prices for transportation and recreation and education.

Inflation was stable at June’s 2.0%, beating market analysts’ projections and remaining at the midpoint of the Central Bank’s target range of 1.0% to 3.0%. Meanwhile, annual average inflation softened marginally to 2.0% in July (June: 2.1%).

Going forward, inflation should remain relatively stable and well within the target range, supported by a tight labor market, strong wage growth and the recent introduction of the carbon tax. That being said, developments in oil markets remain a key risk to the inflation outlook.

In its July monetary policy report, the Bank of Canada projected inflation averaging 1.8% in 2019 and 1.9% in 2020. FocusEconomics Consensus Forecast analysts, meanwhile, see inflation averaging 1.9% in 2019, which is unchanged from the previous month’s forecast. For 2020, our panelists see inflation averaging 2.0%. A new FocusEconomics Consensus Forecast will be published on 27 August.


Author:, Economist

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Canada Inflation July 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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