Canada Inflation July 2018


Canada: Inflation jumps to 3.0% in July

August 17, 2018

Seasonally-adjusted consumer prices rose 0.5% from a month earlier in July, faster than June’s revised 0.2% increase (previously reported: +0.1% month-on-month s.a.). According to Statistics Canada, the rise was driven by higher transport and shelter prices. On the other hand, the rise in food prices moderated in the month.

Inflation jumped to a seven-year high of 3.0% in July (June: 2.5%), well above market expectations. July’s reading saw higher prices across all categories and was driven by the faster rise of fuel costs. Meanwhile, annual average inflation ticked up to 2.0%, the highest level in nearly four years, from 1.9% in June. Core inflation, which excludes volatile items including fuels and fresh produce, jumped to 1.6% from 1.3% in June.

In its July monetary policy report, the Bank of Canada forecast inflation averaging 2.4% in 2018 and 2.2% in 2019. FocusEconomics Consensus Forecast analysts see inflation averaging 2.2% in 2018, which is up 0.1 percentage points from last month’s forecast. For 2019, our panelists see inflation averaging 2.0%.


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Canada Inflation Chart

Canada Inflation July 2018

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

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