Inflation in Canada
Canada maintained a relatively stable inflation rate from 2013 to 2019, averaging close to 2%. The country's inflation management strategies, including a strong monetary policy framework, contributed to this stability. However, the COVID-19 pandemic led to a temporary rise in inflation, driven by supply chain disruptions and government stimulus measures. By the end of 2022, the inflation rate had started to recede, indicating the effectiveness of the Bank of Canada's measures in controlling price increases.
Consumer price inflation in Canada averaged 2.2% in the ten years to 2022. This is above the major economies' regional average of 2.1%. In contrast, the 2022 average figure was 6.8%. For more inflation information, visit our dedicated page.
Canada Inflation Chart
Note: This chart displays Inflation Rate (CPI, annual variation in %) for Canada from 2014 to 2023.
Source: Macrobond.
Canada Inflation Data
| 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|
| Inflation (CPI, ann. var. %, aop) | 1.9 | 0.7 | 3.4 | 6.8 | 3.9 |
| Inflation (CPI, ann. var. %, eop) | 2.2 | 0.7 | 4.8 | 6.3 | 3.4 |
| Inflation (Core, ann. var. %, aop) | 1.8 | 1.2 | 2.8 | 5.6 | 3.5 |
| Inflation (PPI, ann. var. %, aop) | -0.1 | -0.4 | 13.9 | 12.8 | -1.8 |
Inflation declines to lowest level since March 2021 in June
Inflation dropped to 2.7% in June, which followed May’s 2.9% and undershot market expectations. June's figure represented the lowest inflation rate since March 2021 and was within the Central Bank’s 1.0%–3.0% target range. The result was primarily driven by softer growth in prices for housing, transportation, and recreation and culture.Annual average inflation was unchanged at May's 3.1% in June. Meanwhile, core inflation rose to 1.9% in June from the previous month's 1.8%.Finally, consumer prices fell 0.06% from the previous month in June, contrasting May's 0.56% rise. June's result marked the weakest reading since December 2023.
On the monetary policy implications, TD Economics’ James Orlando said:s“[The June inflation] report has increased odds of back-to-back rate cuts. Recent data have supported a cut, with the job market loosening and wage gains decelerating from elevated levels.”
Consensus Forecasts and Projections for the next ten years
How should you choose a forecaster if some are too optimistic while others are too pessimistic? FocusEconomics collects Canadian inflation projections for the next ten years from a panel of 38 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts and averaged to provide one Consensus Forecast you can rely on for each indicator. By averaging all forecasts, upside and downside forecasting errors tend to cancel each other out, leading to the most reliable inflation forecast available for Canadian inflation.
Download one of our sample reports to visualize what a Consensus Forecast is and see our Canadian inflation projections.
Want to get access to the full dataset of Canadian inflation forecasts? Send an email to [email protected].
