Canada Inflation July 2016


Canada: Inflation slows in July

August 19, 2016

In July, seasonally-adjusted consumer prices recorded flat growth, which was down from a the 0.2% increase recorded in June. According to Statistics Canada, prices in six five of the eight components categories that compose of the index increased over the previous month, with the recreation, education and shelter and food categoriesreading categoriesprices registering the largest changegains. These increases were offset by lower prices for the transportation and clothing categories.Prices for transportation, which includes gasoline, and prices for clothing and footwear declined in July.

Inflation was fell to 1.3% in July, down from 1.5% in June. July’s result was marginally below market expectations of 1.4% and remains within the Bank of Canada’s target range of 2.0% plus/minus 1.0 percentage point. Annual average inflation in July was level with matched June’s tally of at 1.4%—the highest reading since July 2015. Core inflation, which excludes volatile items such as gasoline and fresh food, also remained unchanged at June’s 2.1% in July.

The Bank of Canada expects headline inflation to end 2016 at 1.8%, according to its July Monetary Policy Report. For 2017, the Bank expects inflation to close the year at 2.1%. FocusEconomics Consensus Forecast panelists expect inflation to average 1.6% in 2016, which is unchanged from the previous month’s forecast. The panel expects inflation to increase and average 2.02.0% in 2017.

Author:, Economist

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Canada Inflation Chart

Canada Inflation July 2016 0

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

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