Inflation in Canada

Canada Inflation | Economic News & Forecasts

Canada - Inflation

Inflation moderates in April

Seasonally-adjusted consumer prices rose 0.1% from a month earlier in April, matching March’s 0.1% increase. According to Statistics Canada, the increase was driven by higher prices for food; shelter; household operations, furnishings and equipment; and clothing and footwear. The rise was partially offset by lower prices for recreation, education, and reading; transportation; and health and personal care.

Inflation eased from its over three-year high of 2.3% in March to 2.2%, a notch below market expectations. April’s moderation was due mostly to the slower rise is fuel costs. Meanwhile, annual average inflation ticked up to 1.7%, the highest level in three years, from 1.6%. Core inflation, which excludes volatile items including fuels and fresh produce, edged up to 1.5% (March: 1.4%).

April’s milder inflation could discourage the Bank of Canada from raising the target for the overnight rate at its 30 May monetary policy meeting. However, a rate hike should not be entirely written off given above-target inflation and recent economic data pointing to stronger fundamentals in the second quarter. A number of FocusEconomics analysts currently expect a rate hike in the second quarter.

Canada Inflation Forecast

In its April monetary policy report, the Bank of Canada forecast inflation averaging 2.3% in 2018 and 2.1% in 2019. FocusEconomics Consensus Forecast analysts see inflation averaging 2.2% in 2018, which is up 0.1 percentage points from last month’s forecast. For 2019, our panelists see inflation averaging 2.0%.

Canada - Inflation Data

2013  2014  2015  2016  2017  
Inflation Rate (CPI, annual variation in %)0.9  1.9  1.1  1.4  1.6  

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Canada Inflation Chart

Canada Inflation
Note: Annual variation of consumer price index (CPI) in %.
Source: Statistics Canada.

Canada Facts

Bond Yield2.321.00 %Jun 13
Exchange Rate1.310.15 %Jun 14
Stock Market16,3290.23 %Jun 14

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