Canada: Inflation edges down in March
April 19, 2013
In March, consumer prices inched up a seasonally adjusted 0.1% over the previous month, which was below the 0.7% rise recorded in February. According to Statistics Canada, the monthly price increase mainly reflected how higher prices for clothing and footwear as well as for shelter were nearly offset by lower prices for transportation.
Despite the monthly increase, annual headline inflation edged down from 1.2% in February to 1.0% in March, undershooting market expectations of a 1.1% rate. Currently, inflation remains below the Central Bank's target of 2.0% but within the tolerance margin of plus/minus 1.0 percentage points. Meanwhile, annual average inflation remained stable at February's 1.2%.
Simultaneously, core inflation, which excludes volatile items such as gasoline and fresh food, was unchanged at 1.4% in March.
According to its April Monetary Policy Report, the Bank of Canada expects headline inflation to average 1.2% in 2013 and 1.8% in 2014. FocusEconomics Consensus Forecast panellists expect inflation to average 1.8% in 2013, which is unchanged from the previous month's forecast. For 2014, the panel expects inflation to average 2.1%.