Canada Inflation May 2019

Canada

Canada: Inflation ticks up in May to reach seven-month high

June 19, 2019

Consumer prices increased a seasonally-adjusted 0.3% from a month earlier in May, matching April’s figure. According to Statistics Canada, the uptick was mostly driven by higher prices for transport, and recreation and education.

Inflation jumped up to 2.4% in May (April: 2.0%) on higher food inflation, beating market analysts’ projections of a 2.1% outturn and consequently landing above the midpoint of the Central Bank’s target range of 1.0% to 3.0%. Meanwhile, annual average inflation edged higher to 2.2% in May (April: 2.1%).

Looking ahead, inflation should remain within the Bank’s target range, supported by a solid labor market, a recovery in economic activity and the impact of a carbon tax that took effect in April this year.

In its April monetary policy report, the Bank of Canada projected inflation averaging 1.9% in 2019 and 2.0% 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 25 June.


Author:, Economist

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Canada Inflation May 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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