Inflation in Canada
Canada - Inflation
Inflation jumps in February, will likely weigh on Bank of Canada’s plans
Seasonally-adjusted consumer prices rose 0.2% from a month earlier in February, easing from January’s 0.5% increase. According to Statistics Canada, February’s deceleration came as most components in the index moderated from January. Food prices were flat from a month earlier, while clothing and footwear prices fell.
On the other hand, inflation jumped to 2.2% in February (January: 1.7%) on higher gasoline prices from a year ago, as well as increased mortgage-interest costs. February’s reading landed above the midpoint of the Bank of Canada’s target of 2.0% plus/minus 1.0 percentage point for the first time in three months and came in above market analysts’ expectations of a 1.9% print. Higher inflation will certainly factor into the Bank’s decision making and could prompt officials to pull the next rate hike—a number of analysts expect at least two more hikes this year—forward should above-target price pressures be sustained in the near term. Most recently on 7 March, officials were dovish on weak incoming economic data, although higher inflation will likely alter their calculus somewhat by the next meeting on 18 April.
Meanwhile, annual average inflation was stable from a month earlier at 1.6%. Core inflation, which excludes volatile items including fuels and fresh produce, ticked up to 1.5% (January: 1.2%).
Canada Inflation Forecast
The Bank of Canada expects inflation to average 2.0% in 2018 and 2.1% in 2019. FocusEconomics Consensus Forecast panelists foresee inflation averaging 2.0% in 2018, which is unchanged from last month’s forecast. For 2019, our panelists also expect inflation to average 2.0%.
Canada - Inflation Data
| 2012 | 2013 | 2014 | 2015 | 2016 | |
|---|---|---|---|---|---|
| Inflation Rate (CPI, annual variation in %) | 1.5 | 0.9 | - | - | - |
Canada Inflation Chart
Source: Statistics Canada.
Canada Facts
| Value | Change | Date | |
|---|---|---|---|
| Bond Yield | 2.28 | 1.00 % | Apr 18 |
| Bond Yield | 2.28 | 1.00 % | Apr 18 |
| Exchange Rate | 1.27 | 0.15 % | Apr 19 |
| Exchange Rate | 1.27 | 0.15 % | Apr 19 |
| Stock Market | 15,454 | 0.23 % | Apr 19 |
| Stock Market | 15,454 | 0.23 % | Apr 19 |
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Economic News
Canada: Bank of Canada stands pat in April despite higher inflation; rate hike appears likely in May
April 18, 2018
On 18 April, the Bank of Canada (BoC) left its target for the overnight rate unchanged at 1.25%, as widely expected by market analysts.
Canada: House prices essentially flat in March as Toronto market appears to stabilize
April 12, 2018
House prices were essentially unchanged in March as the Teranet-National Bank National Composite House Price Index came in flat from a month earlier, following February’s 0.1% month-on-month decrease.
Canada: GDP contracts in January on unplanned energy-sector shutdowns and a collapse in home sales
March 29, 2018
Canada’s economy contracted unexpectedly at the outset of the year as lower oil output and a weaker services sector weighed on output.
Canada: Inflation jumps in February, will likely weigh on Bank of Canada’s plans
March 23, 2018
Seasonally-adjusted consumer prices rose 0.2% from a month earlier in February, easing from January’s 0.5% increase.
Canada: Bank of Canada leaves rates unchanged in March on weak incoming data amid concerns over NAFTA and the housing market
March 17, 2018
On 17 March, the Bank of Canada (BoC) left its target for the overnight rate unchanged at 1.25%, as widely expected by market analysts.
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