Inflation in Canada
Canada - Inflation
Inflation is unchanged in July at Central Bank’s target midpoint
Consumer prices increased a seasonally-adjusted 0.4% from a month earlier in July, contrasting June’s 0.1% fall. According to Statistics Canada, the increase was mostly driven by higher prices for transportation and recreation and education.
Inflation was stable at June’s 2.0%, beating market analysts’ projections and remaining at the midpoint of the Central Bank’s target range of 1.0% to 3.0%. Meanwhile, annual average inflation softened marginally to 2.0% in July (June: 2.1%).
Going forward, inflation should remain relatively stable and well within the target range, supported by a tight labor market, strong wage growth and the recent introduction of the carbon tax. That being said, 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 27 August.
Canada - Inflation Data
| 2013 | 2014 | 2015 | 2016 | 2017 | |
|---|---|---|---|---|---|
| Inflation Rate (CPI, annual variation in %) | 0.9 | 1.9 | 1.1 | 1.4 | 1.6 |
Canada Inflation Chart
Source: Statistics Canada.
Canada Facts
| Value | Change | Date | |
|---|---|---|---|
| Bond Yield | 1.13 | 1.00 % | Sep 03 |
| Exchange Rate | 1.32 | 0.15 % | Sep 04 |
| Stock Market | 16,449 | 0.23 % | Sep 04 |
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Economic News
Canada: Housing starts recover robustly in August
September 10, 2019
Housing starts increased to 226,639 units on a seasonally-adjusted annualized rate (SAAR) basis in August, according to the Canada Mortgage and Housing Corporation (CMHC), up from July’s downwardly revised 222,467-unit reading (previously reported: 222,013) and smashing analysts’ expectations of a 215,000 print.
Canada: Bank of Canada leaves rates unchanged in September, expects slower growth in H2
September 4, 2019
On 4 September, the Bank of Canada (BoC) left its target for the overnight rate unchanged at 1.75%, as had been widely anticipated by market analysts. The Bank’s decision to stand pat was backed by stronger-than-expected growth in the second quarter.
Canada: Manufacturing PMI worsens in August
September 3, 2019
In August, the IHS Markit Manufacturing Purchasing Managers’ Index (PMI) fell to 49.1 from 50.2 in July.
Canada: GDP growth hits two-year high in Q2 but underlying weaknesses remain
August 30, 2019
Economic activity surged in the second quarter, with seasonally-adjusted annualized (saar) growth accelerating from Q1’s upwardly revised 0.5% (previously reported: +0.4% saar) to 3.7% in Q2 and surpassing market expectations of 3.0%.
Canada: Inflation is unchanged in July at Central Bank’s target midpoint
August 21, 2019
Consumer prices increased a seasonally-adjusted 0.4% from a month earlier in July, contrasting June’s 0.1% fall.
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