While the strength of the Canadian economy is no surprise, with IMF predictions in July 2017 indicating that Canada would be the top performing economy across our G7 trading partners, with growth comes inflation worries.
Inflation in Canada was below expectations in August. That being said, underlying inflation continued to be stronger compared to earlier this year. The Bank of Canada is in a proactive stance to expect more increases in rates.
On the restful moments of Canada’s official ‘Spring kickoff’, the Monday Monitor for the ‘May long-weekend’ receives more welcomed news! May 2017 delivers solid economic data for Inflation and Employment rates. Our Partners at National Bank Financial (NBF) Economics group report a 1.6% inflation rate for April despite some hot housing markets and improving oil prices. While we keep in mind that underlying inflation usually responds to the economic situation with a 3 to 5 quarter lag. For those reasons, we continue to expect higher inflation in the months ahead.