Canadian CPI Preview: Forecasts from five major banks, not out of the woods yet

Statistics Canada will release January Consumer Price Index (CPI) data on Wednesday, February 16 at 13:30 and as we get closer to the release time, here are the forecasts by the economists and researchers of five major banks regarding the upcoming Canadian inflation data.

The January CPI report in Canada is expected to see headline inflation stabilise marginally below 5.0%, while core measures are set to see a mild acceleration.

TDS

“We look for inflation to hold at 4.8% as prices rise 0.6% (0.5% SA) on broad-based strength, with upside risks to core CPI.”

NBF

“While we expect strong print for CPI ex-food and energy given labour shortages and supply chain issues, January headline could also have been upwardly impacted by surging gasoline prices (+5.1%). Otherwise, food inflation should have remained strong, driven by the upward rise in commodity prices. All in all, we expect a 0.6% increase before adjustments for seasonality (0.4% after seasonal adjustments), a print that would leave the annual inflation rate unchanged at 4.8%. We see the annual rate of the common CPI rising from 2.1% to 2.2%.”

CIBC

“Food prices are the main upward threat to our forecast, but given the timing of the latest transportation issues and an increase in dairy prices, February should see the largest gain in that area. Overall, we forecast a 0.5% unadjusted monthly increase in prices, with the annual rate holding steady at 4.8%.”

RBC Economics

“The Canadian CPI YoY growth rate is expected to have ticked down to 4.7% in January, little changed from December.”

Citibank

“Canada CPI NSA MoM (Jan) – Citi: 0.6%, median: 0.6%, prior: -0.1%; CPI YoY – Citi: 4.8%, median: 4.8%, prior: 4.8%. Generally, inflationary pressures remain elevated in H1’22r given persistent global supply issues impacting goods in  particular, which has been one of the key drivers of inflation in Canada in recent months.”