Inflation in Canada
Canada - Inflation
Inflation remains above the Bank’s target for the fourth straight month in February
Consumer prices increased 0.1% from a month earlier on a seasonally-adjusted basis in February, virtually the same as January’s uptick. According to Statistics Canada, higher prices for transportation, housing and utilities, and recreation drove the increase in February.
Inflation eased to 2.2% in February (January: 2.4%), the reading beat market analysts’ expectations of 2.1% and remained above the 2.0% midpoint of the Central Bank’s 1.0%–3.0% target range for the fourth consecutive month. Meanwhile, annual average inflation increased to 2.1% in February from 2.0% the month prior.
Commenting on January’s print, James Marple, a senior economist at TD Economics, noted:
“The COVID-19 outbreak is likely to show up dramatically in inflation data in the months ahead, most obviously in the sharp drop in energy prices. Airlines, which have been effectively shut down due to the pandemic will be another area to monitor..”
This year, inflation is expected to trend below target as Covid-19 weighs on economic activity and as energy prices remain depressed. Prices for essentials such as food, and health and personal care could jump in the short-term due to front-loaded purchasing by consumers, but slack in the economy should more than offset temporary shortages.
In its January monetary policy report, the Bank of Canada projected inflation averaging 1.9% in 2020 and 2.0% in 2021. FocusEconomics Consensus Forecast analysts, meanwhile, see inflation averaging 1.9% in 2020, which is unchanged from the previous month’s forecast. For 2021, our panelists see inflation averaging 1.9% again.
Canada - Inflation Data
|Inflation Rate (CPI, annual variation in %)||1.9||1.1||1.4||1.6||2.3|
5 years of economic forecasts for more than 30 economic indicators.
Canada Inflation Chart
Source: Statistics Canada.
|Bond Yield||1.70||1.00 %||Dec 31|
|Exchange Rate||1.30||0.15 %||Jan 01|
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March 27, 2020
On 27 March, the Canadian dollar (CAD) ended the day at 1.40 per USD, marking a 4.2% depreciation over the same day the month prior.
March 27, 2020
In recent weeks, the government has announced fiscal stimulus measures worth roughly CAD 227 billion (USD 162 billion) to support the economy as it reels from the fallout of Covid-19.
March 18, 2020
House prices increased 0.4% on a month-on-month non-seasonally-adjusted basis in February, according to the Teranet-National Bank Composite House Price Index, stronger than January’s 0.1% uptick.
March 18, 2020
Consumer prices increased 0.1% from a month earlier on a seasonally-adjusted basis in February, virtually the same as January’s uptick.
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On 13 March, the Bank of Canada (BoC) held an unscheduled meeting and cut its target for the overnight rate from 1.25% to 0.75%, following its previous 50 basis-point cut on 4 March.