Canada Inflation


Canada: Inflation stable in February

March 20, 2015

In February, consumer prices rose a seasonally-adjusted 0.2% over the previous month, which contrasted January’s 0.2% drop. According to Statistics Canada, the increase came on the back of higher prices for transportation.

Annual headline inflation in February was stable at January’s 1.0%, thus remaining at the lowest level in over a year. As a result, inflation is at the lower bound of the Central Bank’s tolerance margin of plus/minus 1.0 percentage points around its target of 2.0%. Annual average inflation in February was also stable at January’s 1.9%. Annual core inflation, which excludes volatile items such as gasoline and fresh food, inched down from 2.2% in January to 2.1% in February, thus marking the lowest rate in six months.

According to its January Monetary Policy Report, the Bank of Canada expects headline inflation to average 1.2% in 2015 and 2.0% in 2016. FocusEconomics Consensus Forecast panelists expect inflation to average 1.3% in 2015, which is down 0.5 percentage points from the previous month’s forecast. The panel expects inflation to average 2.1% in 2016.

Author: Angela Bouzanis, Senior Economist

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Canada Inflation Chart

Canada Inflation February 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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