Inflation in Canada
Canada - Inflation
Inflation ticks up December
Seasonally-adjusted consumer prices increased 0.2% from a month earlier in December, contrasting November’s 0.1% fall (previously reported: -0.2% month-on-month). According to Statistics Canada, the uptick was driven by higher food and health and personal care prices.
Inflation rose to 2.0% in December from 1.7% in November, which surpassed market analysts’ expectations of 1.7% and hit the midpoint of the Central Bank’s target range of 1.0% to 3.0%. However, the uptick appeared largely driven by recent changes to the methodology behind airfare calculations, and will likely reverse in the coming months. Meanwhile, annual average inflation was unchanged in December from the previous month at 2.3%. Core inflation, which excludes volatile items including fuels and fresh produce, inched up to 1.7% from November’s 1.5%.
According to Jonas Goltermann, an economist at ING, December’s inflation reading was mostly “due to one-off factors related to the holiday season, with volatile components such as travel tours (6.6% YoY) and air transportation (21.7% MoM)”. Building on this point, Goltermann added, “Movements in these components helped to offset the decline in gasoline prices. Nonetheless, we’d expect the downward trend of headline inflation to resume in the first part of 2019 as the fall in energy prices continues to feed through.”
Canada Inflation Forecast
In its January monetary policy report, the Bank of Canada forecast inflation averaging 1.7% in 2019 and 2.0% in 2020. Last month, Met the why particular Consensus Forecast analysts saw inflation averaging 2.0% in 2019, which was down 0.1 percentage points from the prior month’s forecast. For 2020, our panelists saw inflation also averaging 2.0%. A new Consensus Forecast will be published on 29 January.
Canada - Inflation Data
|Inflation Rate (CPI, annual variation in %)||0.9||1.9||1.1||1.4||1.6|
5 years of economic forecasts for more than 30 economic indicators.
Canada Inflation Chart
Source: Statistics Canada.
|Bond Yield||2.03||1.00 %||Jan 18|
|Exchange Rate||1.33||0.15 %||Jan 21|
|Stock Market||15,354||0.23 %||Jan 21|
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January 18, 2019
Seasonally-adjusted consumer prices increased 0.2% from a month earlier in December, contrasting November’s 0.1% fall (previously reported: -0.2% month-on-month).
January 14, 2019
House prices edged down 0.3% on a seasonally-adjusted monthly basis in December, according to the Teranet-National Bank National Composite House Price Index (November: -0.3% month-on-month s.a.).
January 9, 2019
Housing starts on a seasonally-adjusted annualized (SAAR) basis abated to 213,419 units in December, according to the Canada Mortgage and Housing Corporation (CMHC).
January 9, 2019
On 9 January, the Bank of Canada (BoC) left its target for the overnight rate unchanged at 1.75%, as widely expected by market analysts. The decision to hold was reinforced by the recent fall in oil prices, the prospect of a global economic slowdown and uncertainty over global trade policy.
January 7, 2019
The Ivey Purchasing Managers’ Index (PMI), prepared by the Ricard Ivey School of Business, increased to 59.7 in December from 57.2 in November.