Canada has registered its first technical deflation in 15 years, with consumer prices falling 0.3 per cent in June compared with a year earlier, Statistics Canada
said Friday.
But while the term `deflation` often prompts thoughts of intractable bad times, the Canadian economy`s flirtation with falling prices is expected to be brief, analysts said, and the consumer price index
will likely start to rise again in late autumn.
"I don`t think we`re looking at widespread deflation in this country," Douglas Porter, deputy chief economist at BMO Nesbitt Burns, said in an interview.
While the Canadian economy has seen some month-over-month price declines lately, June is the first time since November 1994 that consumer prices have fallen outright on the year. And it`s the slowest pace of inflation since August 1955, economists pointed out.
But the drop was mainly due to a 19-per-cent plunge in energy products, especially gasoline, Statistics Canada said. Excluding energy, consumer prices rose 2.1 per cent from a year ago.
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said Friday. But while the term `deflation` often prompts thoughts of intractable bad times, the Canadian economy`s flirtation with falling prices is expected to be brief, analysts said, and the consumer price index
will likely start to rise again in late autumn. "I don`t think we`re looking at widespread deflation in this country," Douglas Porter, deputy chief economist at BMO Nesbitt Burns, said in an interview.
While the Canadian economy has seen some month-over-month price declines lately, June is the first time since November 1994 that consumer prices have fallen outright on the year. And it`s the slowest pace of inflation since August 1955, economists pointed out.
But the drop was mainly due to a 19-per-cent plunge in energy products, especially gasoline, Statistics Canada said. Excluding energy, consumer prices rose 2.1 per cent from a year ago.
Read the full article here.