Canada Inflation March 2019

Canada

Canada: Inflation jumps in March

April 17, 2019

Consumer prices increased a seasonally-adjusted 0.3% from a month earlier in March, down from February’s revised 0.4% rise (previously reported: +0.3% month-on-month). According to Statistics Canada, the uptick was mostly driven by higher prices for food, shelter and transportation.

Inflation notched up to 1.9% in March (February: 1.5%), as analysts had projected, but remained slightly below the midpoint of the Central Bank’s target range of 1.0% to 3.0%. Meanwhile, annual average inflation was stable at February’s 2.2%. Core inflation, which excludes volatile items including fuels and fresh produce, inched down to 1.9% in March from 2.0% in the month prior.

Providing a short-term outlook on inflation was Stephen Brown, senior economist at Capital Economics:

“Oil prices have been higher than we expected of late, which means that our previous forecast for inflation to average 1.5% in 2019 is now looking too low […] We don't see much chance of inflation averaging 2% this year, unless oil prices rise even further, to say $80 per barrel for WTI, in the next few months.”

In its January monetary policy report, the Bank of Canada projected inflation averaging 1.7% in 2019 and 2.0% in 2020. FocusEconomics Consensus Forecast analysts, meanwhile, see inflation averaging 1.8% in 2019, which is unchanged from last month’s forecast. For 2020, our panelists see inflation averaging 2.0%.


Author:, Economist

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Canada Inflation March 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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