CAD: Gasoline prices pushed inflation higher in April – RBC Economics

Research Team at RBC Economics, notes that the Canada’s consumer prices rose 0.3% in April, matching market expectations and pushing the annual rate of inflation up to 1.7% from 1.3% in March.

Key Quotes

“Core CPI rose 0.2% and the annual rate edged up to 2.2%. Core inflation has held in a fairly tight range around 2% since mid-2015, which the Bank of Canada attributes to offsetting pressures from economic slack and currency depreciation. As in the previous month, April’s increase in headline CPI was driven by rising gasoline prices (+8.9%), which have picked up recently alongside higher crude oil prices.

Our forecast assumes oil prices will average close to current levels in the second half of the year, which would result in the downward impact on inflation from energy prices softening toward the end of 2016.”