Canada Inflation June 2019

Canada

Canada: Inflation ticks down in June

July 17, 2019

Consumer prices fell a seasonally-adjusted 0.1% from a month earlier in June, contrasting May’s 0.3% rise. According to Statistics Canada, the decrease was mostly driven by lower prices for transport, and recreation and education.

Inflation edged down to 2.0% in June (May: 2.4%), on lower prices at the pump, matching market analysts’ projections and consequently landing at the midpoint of the Central Bank’s target range of 1.0% to 3.0%. Meanwhile, annual average inflation also softened marginally to 2.1% in June (May: 2.2%).

That said, inflation average notably higher in Q2 this year relative to the first quarter, likely the result of the carbon tax implemented at the start of the second quarter and a tight labor market. Going forward, inflation will likely remain within the Bank’s target range, supported by healthy labor market dynamics. Developments in oil markets remain a key risk to the inflation outlook.

In its July monetary policy report, the Bank of Canada projected inflation averaging 1.8% in 2019 and 1.9% in 2020. FocusEconomics Consensus Forecast analysts, meanwhile, see inflation averaging 1.9% in 2019, which is unchanged from the previous month’s forecast. For 2020, our panelists see inflation averaging 2.0%. A new FocusEconomics Consensus Forecast will be published on 23 July.


Author:, Economist

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Canada Inflation June 2019

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


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