How will inflation affect the Canadian economy in 2023?

As the effects of higher interest rates continue to spread through the economy, and with declines in energy prices and improved supply chains, inflation is projected to fall to around 3% in the middle of 2023 and reach the 2% target in 2024. What you need to know about the Bank of Canada’s assessment of the Canadian economy.

When did Canada's inflation peak?

After decades of relative quiescence, prices surged to levels last seen during “the Great Inflation” of the late 1970s and early 1980s. The consumer price index (CPI) peaked in June 2022 to 8.1%, although the key measure of Canada’s inflation rate has slowly drifted lower since then.

What is Canada's preferred measure of inflation?

The BoC’s preferred measure of Canadian inflation is the Consumer Price Index (CPI). This measure has been above the central bank’s 2% target since March 2021. The labor market remains tight.

How are the CPI inflation rates presented in the table?

The CPI inflation rates in the table are presented both on a monthly basis (compared to the month before) as well as on a yearly basis (compared to the same month the year before). Using the tabs you can switch between the 2023 CPI inflation overview and the 2023 HICP inflation overview.