Canada Inflation


Canada: Inflation slows in April to year-and-a-half low

May 22, 2015

In April, consumer prices fell a seasonally-adjusted 0.1% over the previous month, which contrasted March’s 0.3% increase and represented the lowest figure in three months. According to Statistics Canada, four of the eight components of the index decreased, with the largest decline coming from recreation prices.

Annual headline inflation fell from March’s reading of 1.2% to 0.8% in April, thus reaching the lowest level since October 2013 and undershooting market expectations of a 1.0% increase. As a result, inflation is below the target range of 2.0% plus/minus 1.0 percentage point. Annual average inflation in April came in at 1.7%, which was slightly below March’s reading of 1.8%. Annual core inflation, which excludes volatile items such as gasoline and fresh food, inched down from 2.4% in March to 2.3% in April.

The Bank of Canada expects headline inflation to close 2015 and 2016 at 1.4% and 2.0% respectively, according to its April Monetary Policy Report. FocusEconomics Consensus Forecast panelists expect inflation to average 1.0% in 2015, which is up 0.1 percentage points from the previous month’s forecast. The panel expects inflation to average 2.1% in 2016.

Author:, Economist

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Canada Inflation Chart

Canada Inflation April 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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