Canada: Inflation recedes in February
March 21, 2014
In February, consumer prices increased a seasonally-adjusted 0.3% over the previous month, which was above the 0.2% recorded in the three previous months. According to Statistics Canada, the increase reflected higher prices in six of the eight categories measured, with alcoholic beverages and tobacco, as well as shelter and transportation, registering the largest gains. Annual headline inflation fell from 1.5% in January to 1.1% in February. The print was slightly above market expectations of a 1.0% increase. Inflation remains just within the Central Bank's tolerance margin of plus/minus 1.0 percentage points around its target of 2.0%. Meanwhile, annual average inflation held at January's 1.0% in February. Core annual inflation, which excludes volatile items such as gasoline and fresh food, inched down from 1.4% in January to 1.2%. According to its January Monetary Policy Report, the Bank of Canada expects headline inflation to average 1.3% in 2014 and 1.9% 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: Carl Kelly, Economist