Canadian consumer price inflation likely accelerated in April

The consumer price inflation of Canada is expected to have accelerated in April from March’s print. According to a TD Economics research report, the headline inflation is likely to have firmed to 1.7 percent year-on-year in April from 1.6 percent.

On a year-on-year basis, energy prices are likely to have stayed supported on higher gasoline prices while shelter costs are expected to have maintained their upward pull in line with the continuous tightness in the Canadian housing market. Deflation in food prices are expected to have stabilized, though retail competition throughout grocery stores continues to be a source of downside risk in the near-term.

“Our forecast also assumes the core metrics of inflation (CPI common, trimmed mean and median), which averaged 1.5 percent y/y in March, to be stable or modestly higher, with limited risk for further downside in line with the reduction in the amount of economic slack over the past few quarters.”, added TD Economics.